There are a few main factors that will affect the cost of your car insurance. Of course, it pays to shop around, but there are a few things you will find result in similar premium costs no matter which insurer you decide to go with.
• Market value vs agreed value- The cost of the insurance will vary depending on whether your car is insured for the market value or the agreed value. Market value is the price that you would get for your car if you were to sell it in the open market. The agreed value is a price that the insurer and the insured agree on that the car is worth, and thus insured for, should anything happen.
• Where you live and work- If you live in a suburb where you are more likely to have a car accident or have your car stolen, it is more likely that your car insurance will be more expensive than if you live and work in an area that is considered low risk. This also takes into consideration where you park your car. Is it parked in a secure garage, or on the street?
• Your experience as a driver as well as your age-If you are under 25 or 30 car insurers generally have higher premiums for younger drivers. This is because the younger you are the less driving experience you’ve had and also the more likely you are to be involved in an accident. Older drivers can also qualify for discounts in some cases.
• The type of car you have- The type of car you drive will also influence how much your car insurance will be. This is calculated by looking at a number of factors including any modifications and the costs the car will incur if it needs repairing. Often the more powerful the engine and type of car, the more likely it will be broken into or even stolen.
• Your history- Your driving history will also be taken into consideration when getting your car insured. If you have previous driving offences, previous claims and have had a number of accidents you will most likely be required to pay higher premiums than a driver that has had none or little driving offences against their name.
Other factors such as the level of excess you agree to pay, the number of people driving the car and whether you own the car or have a loan for it will also influence how much you pay for insurance.
It’s a good idea to get a number of car insurance quotes from a number of insurers before deciding on going with one over the other. You may find huge differences in the prices you have been quoted as well as the level of cover on offer.
I hope our list of some of the factors that affect the cost of your car insurance premiums has given you some insight into the different factors taken into consideration when an insurer is calculating how much you should pay to insure your vehicle.