Factors that impact your car insurance premium

By understanding the factors that impact your car insurance premium you can choose cover that’s right for you and find ways to keep your premium down.  

Insurers use a number of things to determine risk and how likely you are to make a claim on your policy when assessing a car insurance quote. Here’s a detailed look at some of the main areas that affect the cost of your car insurance. 

• The vehicle – The Association of British Insurers gives all vehicles a group rating based on the risk of the vehicle. The rating helps insurers quickly determine things like the vehicle’s worth, new car values, availability of parts and body shells and car security. Insurers also asses their own individual data; if a certain make or model is often involved in an accident claim for example, this could go on to have an impact on the way the insurer assesses the vehicle. 

• Your claims history – Insurers consider your claims history from the past three to five years to assess risk. The more claims made and the more money that’s been paid out to cover the cost of repairs could result in an insurer assessing you as higher risk and charging more for your policy.

• The driver – Young drivers or drivers with past convictions typically pay the most for their insurance because they are considered high risk. Drivers with 20 years of experience with no claims or convictions in contrast are considered a safe risk and typically benefit from a lower premium.

• Mileage – How far you drive weekly also has an impact on your premium. Simply put, the more time you spend on the road the more likely you are to cause or be involved in an accident. If you are driving much more than the average road user you may see your premium rise. Though it may be tempting to fudge the numbers, lying about how often you drive could invalidate your policy. If you want to reduce your mileage each week look for opportunities to rideshare or walk and take public transport to bring the number down.

• Security – The more secure your car is the better it is for your premium. If you have an alarm or immobiliser fitted your car is less likely to be stolen, and you could end up paying less than someone who doesn’t have any security installed in their car.

• Address – Where you live and where your car is parked overnight can also impact your premium. In a city where there are increased levels of traffic there is greater chance your car will be in an accident or vandalised or stolen. Areas high in crime can also have an impact on the price you pay, as well as parking the car on a road overnight rather than a locked garage.

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