Factors affecting premium
The cost of car insurance premiums can vary significantly from one person to another. But how does an insurance company decide exactly how much your premium should be? There are a number of factors that are taken into account. This is not an exhaustive list of all the factors that may affect your premium and different insurers will vary but car insurance premiums can be calculated using the following criteria:
Who’s driving? Statistics show that younger people make more claims on their car insurance than older people, and that women make fewer claims than men. So your age and gender will affect the amount of your premium - if you are in a lower risk group, your premium will be lower. Similarly, the nature of your occupation may affect your premium. For example, if your job involves spending a lot of time on the road, you could be considered more likely to make a claim. And of course, if you want cover for additional drivers, your premium will be affected, as their age, gender, occupation and driving history will also be taken into account.
Driving history. People with a clean driving record usually attract lower premiums, whilst those with convictions for speeding or drink driving can certainly expect higher premiums. Once a conviction is over 5 years old however, it will not be taken into account in calculating your premium.
What type of car is it? Large, powerful cars are usually expensive to repair and more attractive to car thieves and are therefore more expensive to insure. Smaller cars with lower repair costs, and less obvious value to thieves, generally cost less to insure. Every model of car in the UK is given an Insurance Group rating that provides insurers with a guide for setting premiums for the different models.
Where do you live? People who live in the country usually pay less for their car insurance than those who live in cities. This is because more claims are made in urban areas. Insurance premiums actually vary from postcode to postcode, depending on the vehicle crime statistics in the local area. If you live in a high-risk area, your premiums are likely to be higher.
Where do you keep your car? Your premium will be affected by whether you keep your car in a garage overnight, in a driveway or on the street. The better your security against car theft and damage, the lower the premium is likely to be – so if you have a car alarm, immobiliser or tracking device, you can expect to pay less
Why does your car insurance quote vary so much between insurers?
Taking everything into account, it’s clear why car insurance premiums vary so much from one individual to another. But why are you likely to get such a range of different prices from one insurer to another? At esure we are able to keep our premiums low because we only take drivers with at least 4 years no claims discount – so we receive fewer claims and have lower costs - and we can pass a real saving onto our customers. Why not get a quote
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