How to Calculate Car Insurance Premium?
The insurance rate you give yearly for your car insurance premium cannot be the same as the amount paid by your neighbors. Car insurance rates is based on many variable aspects.
- Age of the driver
- Gender of the driver
- Performance of your vehicle
- Number of years you have been driving
- Use of the car on a daily basis
- Make and model of the car
- Safety rating for the vehicle
- Security gadgets (air bags, anti-lock braking systems, etc)
- Antitheft equipments (cut off switches, computer chip keyed ignitions, etc)
- Manufacturing year for the motor car
- The place where the motor car is used
- Your track record
- Mileage of the motor-car assessed per annum
- Convenience of replacement or repair for damaged cars
- Nature-related disaster claims of the location
- National averages for injury cost
- Mishaps and theft
By taking into consideration these elements, your insurer will calculate your annual insurance premium.
The amount you pay for your insurance policy is called the insurance premium and reflects the likelihood of the theft of your car and your involvement in accident. It is important to note that while your car insurance premium will reflect many personal factors such as your age, sex, and the area you live, these are based merely on statistical averages and not specifically meant to directly reflect your driving ability. You may be a male under 25 yrs and prove to be an exceptional driver; however, your premium will reflect the fact that a high proportion of road accidents are caused by young males, a category which you unfortunately may fall into.
Those most likely to pay high premiums are young, adult males with a high performance vehicle with relatively little driving experience. Conversely, female drivers in their early fifties with a small low performance vehicle who have been driving the majority of their life are more likely to pay a significantly lower car insurance premium.
Type of car :
Insurers divide cars into 20 different groups. The higher the group number, the higher the premium. These divisions are based upon a number of factors, such as:
- The cost to repair certain body parts.
- The ease of replacement of certain body parts.
- The ease to find certain replacement body parts.
- The acceleration of the vehicle.
- The value of the car when new.
- The car's resistance to theft.
- Engine size : The bigger your engine, the more you pay. Bigger engine cars are more likely to end up in accidents, and are generally larger and more expensive than smaller cars.
By collating this information, a sliding scale is calculated for the car which will ultimately correspond to the premium necessary to cover the vehicle.
If you driver a high performance vehicle, then your insurance premium will inevitably be higher to match the value of the vehicle. High performance vehicles are not only more expensive to replace in the event of theft, but the replacement of parts and overall repair cost are far more than your average vehicle, given the specialist nature of the car. The greater you're driving experience, the better when you are insuring a high performance vehicle. Young drivers insuring a high performance vehicle will inevitably pay high premiums for insurance.
Young Drivers :
Young drivers are significantly chastised when it comes to buying car insurance. Statistically, young drivers are considered to be the highest risk demographic on the road, as they are far more likely to be involved in an accident than any other age category. One way to save on this is to put yourself on your parent’s insurance plan if possible (You can easily save 20-40% this way).
- Studies have proven that a 17-year-old driver is seven times more likely to be involved in an accident than a middle-aged driver of the same gender, mile for mile. It is exactly these types of statistics which justify the high car insurance premiums which under 25 year olds have to pay.
Female Drivers :
Female drivers are considered to be less of a risk than their male counterparts. The upshot of this is that female drivers across all age categories can benefit from lower car insurance premiums. Surprisingly, this is not because female drivers have statistically significant fewer accidents than female drivers, but rather because those accident women are involved with, tend to be far less serious. If you’re a male expect to pay more for car insurance. If you’re a male and under 26 years old unfortunately you will have to pay much more compared to a female over the age of 26.
Your annual mileage :
The more you drive the more you’ll pay. It’s important you give the best estimate you can, annual mileage can greatly affect the cost of your car insurance. Spend some time to get the most accurate estimate you can.
Your location :
If you live in the city expect to pay more. Urban areas are more prone to accidents compared to rural areas, and generally have a higher crime rate which causes costly car insurance premiums.
Although the majority of factors which affect the cost of your insurance premium are beyond your control, though that is not to say that you are completely unable to influence the amount you pay for your car insurance policy.
Full coverage car insurance offers a far greater deal of protection, and in addition to cover for your passengers and protection against any claims that may be made against the damage you caused, full coverage car insurance cover will also cover you against damage to your car.
How to Lower Car Insurance Premiums?
A simple method to gain concessions car assurance on-line is to look around carefully. Many insurance companies will have different coverage premiums depending on historical losses for different geographical areas. Some insurance companies offer competitive rates to new geographical areas they are trying to access although will offer lesser cars insurance rates to established regions in which they already have excellent commercial relations with brokers, repair facilities and claim adjusters.
Changing the car insurance online coverage you purchase as per your need, and you will also see a savings. If as per records you drive the vehicle 10,000 miles a year, then ensure that you have not predicted a higher mileage. In addition, ensure that you do not purchase duplicate insurance. Ensure to avoid replacement rental vehicle should you already have a roadside assistance or similar group plan.
Furthermore, make sure you talk about a vehicle insurence online rebates with your prospective insurer. Ask for good driving discounts, multiple automobile concessions, safety or anti-theft gadgets discounts for new customers. If you are pricing insurance for an automobile you might buy then be sure to check the safety ratings of the vehicle. If you opt for a model which has a better than general safety history, you may save two hundred dollars yearly. This saving goes up if you choose a coverage plan that thieves hate. Effective anti-theft devices can slice 15-20 percent more off your car coverage charges.
Worth knowing too is that every 12 months the National Highway Traffic Safety Administration of USA crash tests more than a hundred of the most popular motor-vehicles into a barricade at thirty five miles per hour. They use a star system to rate these vehicles for safety which has a direct bearing on your online car insurance premium.
The other way to save on the car coverage online policy is if you already have a coverage, homeowners insurance for example. Ask the same organization for a discount on a second insurance policy on your motor car. Often you will be offered a 10-15 percent discount for using the same company.
Various companies also use your credit ranking when they want to offer on line cars coverage rebates, and a poor credit rating can change your online car insurance premium. The insurer giving the quote checks your credit just like they check your driving track record. Your credit rating should be closely watched, and if there are any adverse errors do what it takes to correct the same.
By and large, a safe track record is by far the biggest factor that contributes to your online car coverage reductions. If you have not been involved in accidents or moving violations during the past 3 years you may be able to lessen your car insurance premiums by up to 40%.