Uncovering the Factors Impacting Your Car Insurance Premium

 Uncovering the Factors Impacting Your Car Insurance Premium

Insurance premiums are determined by a number of factors, including your age, driving record, and where you live. But did you know that your credit score can also play a role? In this article, we'll take a closer look at the factors that impact your car insurance premium.

Make, Model & Variant

When it comes to your car insurance premium, your car's make, model and variant can all play a part. For example, a luxury car is going to be more expensive to insure than a standard family sedan. Why? Because it's seen as a higher risk by insurance companies. Likewise, a sports car is going to be more expensive to insure than a hatchback. This is because sports cars are often driven in an aggressive manner, and are more likely to be involved in an accident. So, what does this mean for you? It means that you need to be honest when you're answering questions about your car. The make, model and variant you choose can have a direct impact on the cost of your car insurance premium.

Age of the Car

The age of your car also impacts your car insurance premium. The newer the car, the higher the premium will be, as there is a greater chance that it will be stolen or involved in an accident. If you have an older car, you can expect to pay lower premiums.

No Claim Bonus

When you don't make any claims on your car insurance policy, you earn a No Claim Bonus (NCB). This is a percentage of your premium that's discounted and kept by the insurance company as an incentive for drivers to stay claim-free. The longer you stay claim-free, the higher your NCB will be. And the more years you have of NCB, the more money you can save on your car insurance premiums. In some cases, it can be as much as 50%! That's why it's so important to protect your NCB. If you make a claim, even if it's not your fault, your NCB will be reduced or even canceled altogether. So make sure you know what to do in case of an accident.

Anti-Theft Device

If you're looking to lower your car insurance premium, one way to do so is by install an anti-theft device in your vehicle. By doing so, you're essentially telling your insurer that you are less of a risk to them and they will often reward you with a lower premium. There are a few different types of anti-theft devices, but some of the most popular ones include:

- Tracking devices: A tracking device is typically installed by a professional and allows your car to be tracked via GPS. If your car is stolen, the police will be able to track it down and recover it.

- Immobilizing devices: An immobilizing device prevents thieves from being able to start your car. They work by interrupting the flow of electricity or fuel to the engine, making it impossible to start the car.

- Alarms: A car alarm is a loud security system that sounds off when someone tries to break into your car. It's a great way to deter thieves and can also alert you if someone is trying to break into your car.

Insured declared value

The next factor we're going to look at is the insured declared value, or IDV. This is the maximum amount that the insurer will pay out in the event of a total loss. The IDV is calculated by taking into account the current market value of the vehicle, minus any depreciation. So, if your car is five years old and has a market value of $10,000, the IDV would be $7,500. Now, the IDV is important because it affects how much your premium will be. The higher the IDV, the higher your premium will be. And this makes sense when you think about it—if there's more money at stake, then the insurer is going to charge you more to cover that risk. So, if you're looking to keep your premium down, one way to do it is to lower your IDV. But of course, that also means that you'll get less money from the insurer if your car is totaled.

Conclusion

When you're shopping for car insurance, it's important to understand which factors will impact your premiums. Insurance companies take a variety of factors into account when setting your premiums, including your age, sex, location, and driving record. To get the best rates, be sure to shop around and compare rates from different insurers. You may also be able to save money by increasing your deductible or adding a car to your policy. By understanding which factors influence your premiums, you can make informed decisions about which insurance company is right for you.

Enjoyed this post? Never miss out on future posts