The Factors That Increase Car Insurance Premiums

 

Car insurance premiums are not set by a car insurer's whim. Many factors go into determining car insurance rates, including your car's make and model, the cost of repairs, how much you drive per year, and where you live. One of the most important factors is whether or not your car has safety features like airbags to protect passengers in the event of an accident.

We shall therefore examine in more depth many of the factors that will impact our car insurance premium. Knowing them could perhaps help us to achieve better premiums going forward. There is also the possibility, too, that different insurance companies may load their premiums slightly differently because of the claim rates their policyholders have shown during the year. It is important to shop around to compare the different car insurance prices.

Driving Record

An important factor with insurance is your driving record. If you have a clean driving record, you're likely to pay less for car insurance than someone who has been in accidents or received speeding tickets. It is worth driving carefully and even having a camera fitted to your vehicle as proof, should you be accused of an accident that was not your fault but might be difficult to prove without sufficient evidence.

Type of Vehicle

Insurers also look at the type of car you drive when setting rates. Sports cars and luxury vehicles are typically more expensive to insure than basic vehicles that might be used to travel to and from a workplace.

It never pays to have a high-performance vehicle unless it is something that makes you particularly happy. This will cost you dearly with insurance. Apart from the make and model being known for its high performance, the higher engine size will be a factor in making your premium more expensive. This is all made simpler for insurance companies because of the groups that vehicles are placed in that most insurers will take note of. Your car will, for instance, be placed in a group from 1 to 50, with 50 proving the most expensive to insure.

What can make a vehicle fall into a higher group is that it would cost more to repair or replace if from one of the luxury manufacturers. You will know if this is likely because even something like a new wheel or tyre will cost you more than with other vehicles. Every part tends to be more expensive when you buy a genuine luxury brand replacement. Insurers will encounter this too, and so allow for it in their premium calculations, which have generally already been worked out by the vehicle grouping system.

Location

Car insurance rates also vary depending on where you live. If you live in an urban area, you're likely to pay more for car insurance than someone who lives in a rural area. This is because there's a greater chance of your car being stolen or involved in an accident. Certain cities are known for their higher crime rates and insurers are aware of this fact.

It may not be cost-effective to move home for the sake of insurance premiums, but that could certainly make a difference if we had that choice.

Approved Safety and Security

Ironically, the luxury brands come with improved safety, so while they cost more because of their performance, there can be discounts because of their other features. Insurer-approved alarms will attract discounts as they prevent thieves from stealing the vehicle in many cases.

There are many factors that car insurance companies take into account when setting rates. The best way to get the lowest car insurance rate is to shop around and compare quotes from multiple insurers. It is good to know that you can receive discounts when you or your vehicle satisfy certain criteria.