How an Insurance Company Determines Premiums

by khalid on 23/03/2012 · 0 comments

car insurance

car insurance

Insurance prices fluctuate massively between individuals, areas, time of usage, security and much more. There are a huge number of variables in the insurance system, so it is often difficult to discern where to get the best deal. This article will consider what car insurance companies look for, so that you can understand how to get the best deals:

Age
The biggest factor that insurance companies consider is age. Between the ages of 17 and 21 you are considered a very high-risk driver. This is based upon the statistical fact that people in this bracket have the highest rate of accidents. At the age of 21, there is a slight reduction in cost but the major hurdle is 25. At 25 you are considered a sensible and safe driver, so you can finally get the car that you have always wanted.

Gender
Males are higher risk than females in terms of seriousness of accidents. Females actually have a greater rate of minor accidents, but insurance companies care far more about the accidents which cause tens of thousands of dollars’ worth of damage.

History
Any points which you have on your license will increase your premium. Thankfully, points get wiped off your license after a certain period of time, so there is an opportunity for you to reduce your car insurance quotes after a number of years. The best tactic is to avoid speeding or breaking other road rules in the first place.

Credit History
Surprisingly, your credit history is another consideration that insurers look at when deciding how much to charge you. A bad history of credit will increase your premium greatly. If there are two parties insured on the same vehicle, it is wise to name the primary driver as the person with the better credit history.

Occupation
Insurers discriminate intensely with regards to occupation. A builder is considered high risk because it is believed that they will keep tools in their ute or van overnight and thus increase the cost of a claim. Despite the fact that this may not be the truth, putting builder down as your occupation will increase your premium. As long as you remain truthful, it is sensible to experiment with your job title until you get a better offer. The difference between writer and journalist, for example, is negligible in terms of job type, but huge in terms of quote variation.

Security
The security of your vehicle is an element which is considered as a huge part of a premium. Depending upon where your vehicle is registered, there could be a huge change in the charges. Consider registering your car at a secondary address to reduce the premium. This is only acceptable if you do genuinely spend a large amount of time with the car at that address. Another way to reduce the security element of your premium is to store your car in a garage. Hiring a garage can sometimes even be cheaper than paying the alternative premium.

Stay tuned to BellTheBull Blog for more information on car insurance !

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