Understanding the Different Factors That Impact Your Insurance Price

Understanding what factors go into calculating your overall car insurance price is the first step to finding the best deal for your circumstances.

For example, the make and model of your vehicle, as well as its value and safety features, can be taken into consideration when determining a rate. Your driving record is also scrutinised when calculating a quote; any accidents, claims, or points on your licence may affect your overall premium.

Age and location could also impact the overall quote. Typically, those who are younger may be quoted higher rates due to their lack of experience behind the wheel. And those living in an area with higher vehicle crime rates could increase premiums due to increased risk of theft or vandalism. But there are discounts available that could help lower costs – bundling car insurance policies is one way to achieve this.

It is important to research all options thoroughly in order to get the best deal possible on a car insurance policy. Understanding some of the key factors that affect car insurance policies can help you save money on their premiums and ensure they are properly covered too. And if  lowering your premium is of interest, there are additional money-saving car insurance policy tips in this article.

Make and Model of Your Car

When it comes to car insurance, the make and model of your car could impact the premium you’re charged. This article on Forbes outlines the most expensive and least expensive cars to insure in 2023.

Typically, each car is assigned an insurance group that helps insurers determine how much to charge. There are 50 insurance groups, and cars are allocated a number from 1 to 50 based on how new, expensive, and powerful they are. Cars in the lower insurance groups are typically seen as less risky to insure and will generally receive a lower premium than cars in higher insurance groups.

Older, small hatchbacks tend to be placed in lower insurance groups and may attract lower premiums. At the other end of the scale, cars that are considered powerful or luxurious will typically be placed in higher groups which will reflect the premium charged too. While this is the rule of thumb, some older cars may be placed in higher insurance groups, particularly if insurers have cause to believe they’ll be expensive to repair or riskier to drive.

Because the age and model of your car can impact your car insurance premium, it’s worth doing your research on a potential purchase before committing. There are online tools available that can help work out the car’s insurance group. If you know the car’s registration number, you could even get a few insurance quotes to help you understand how much you might need to pay for cover.

Driving History

Your driving history is an important factor that is taken into consideration when determining your car insurance premium. It includes any claims or convictions you may have had, as well as your no-claims discount (NCD).

The more claims you’ve had in the past, the higher your premium will likely be. Convictions will likely increase your premium too – whether they’re driving-related or not. Some companies may even decline to offer a quote if they feel that a driver has too many serious convictions.

On the other hand, a lengthy no-claims track record could work in your favour and help lower your overall car insurance premium. Drivers with a 5-year NCD save, on average, 60% on their car insurance premium.

If you want to keep your car insurance premiums low, there are a few things you can do to maintain a good driving record. Following traffic laws and driving safely are obvious ways of reducing risk, but it’s also important to think carefully before making an insurance claim. Sometimes preserving a no-claims discount could be more beneficial than claiming on an incident – so make sure you weigh up the options before deciding.

It’s also essential that you disclose any claims or convictions when taking out car insurance or requesting quotes. If information is concealed unintentionally or deliberately, this could void your car insurance or result in a lower payout in the event of a claim. 

Age and Location

Your age and location play a key role in working out your car insurance premium. Generally speaking, younger drivers will pay higher premiums than older drivers. This is because they are seen as a greater risk due to their lack of experience on the roads and the likelihood of them being involved in an accident or filing a claim.

Your location also impacts car insurance premiums significantly. Your postcode tells your car insurer what the traffic trends are like in your area, what the crime rates are like, as well as the number of claims and accidents that happen around your postcode. All of these could have a direct impact on your premium costs.

For example, if you live in an area with high crime rates or close to busy roads where traffic accidents occur frequently then chances are that you’ll face higher premiums than someone who lives in a safer area with less traffic.

There are ways to lower your car insurance premium even if you live in a high-risk area. For example, it may be worth increasing your voluntary excess if you can afford it. Also, parking overnight in a safe location like a private drive or garage could result in a lower premium. Building up your NCD is also a great way to reduce your premium in the longer term.

Other Factors that Impact Your Car Insurance Premiums

There are several other ways you can lower your premium without sacrificing quality cover or value for money. These include bundling insurance policies, completing advanced driving qualifications, and considering black box policies.

Bundling your insurance policies can often result in cheaper premiums as some insurers will offer discounts if you purchase multiple policies with them – think multi-car insurance policies or even home and car insurance policy bundles. Make sure you compare the costs before signing up though as this isn’t always the cheapest option. However, going down this route may still save you money and the convenience factor should not be underestimated either.

Another way you could potentially save money on your premium is through advanced driving qualifications such as Pass Plus which teaches drivers advanced driving skills and is great for young drivers who’ve just passed their test. You could even consider motorway driving lessons and refresher driving lessons offered by institutions like the AA. But, be sure to check with your insurer that these courses will actually make a difference to your premium before taking one.

Black box, or telematics policies, could lower your premium too. By installing a small black box in your car that tracks things like speed, braking distance, and acceleration, insurers can offer discounts based on how safe a driver you are behind the wheel.

Saving money on your car insurance

There are several factors that affect the overall price of your car insurance, including the make and model of your car, your driving history, and your age and location to name a few. But, by understanding these factors and how they impact your premium, you can take steps to reduce your overall costs.






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