Sign In

Factors that Determine Premium of Car Insurance

​​Dream comes true after purchasing a new car. Like most wise individuals, you get the insurance policy for a car to ensure the security of your dreams. However, one day your office friends say he/she pays a lesser premium than what you pay and you start thinking whether the insurance company oversold you the insurance?

Yes, car insurance premiums vary because they are decided by considering several factors. With digitalisation, buying car insurance online has become a task of just few hours. However, understanding the process behind the premium rate is equally important. This article will help you have an insight on factors that determine the premium of Car Insurance.

The car owner

The first factor that influences the car insurance premium is you and your personal details. The factors like age, gender, marital status and personal history on road are considered by insurance companies while deciding premium. Generally, female car owners pay a lesser premium than male as women are less daring when it comes to driving. Married people also pay a low premium than single or unmarried individuals. Lastly, the youngsters under the age of 25 pay the highest premium whereas people between 50 to 65 pay least.

The driving skills and the car

 Most insurance companies develop vehicle safety ratings with the help of data from customer claims and analysis of the industry safety reports. Insurance policy for the car comes up with a discount for safe drivers.

The premiums are often high for cars that are more vulnerable to damage, driver's injury and even theft. Your insurer may offer you a lower premium in case you buy a car with high ratings in terms of driver and passenger protection. Furthermore, the premiums for diesel cars are more expensive than petrol cars.

The usage of a car

Car owners who use their vehicle for everyday travel and long-distance commute generally pay a higher premium than people with less usage of the vehicle. This is because the more you drive, the higher is the chance of accidents and road crash.

The location

The area where you live and buy car insurance policy highly influence the premium. Car owners usually end up paying high premium when they are living in the locations with a history of vandalism and car-thefts.

The choice of car owners

Many insurance providers offer a customised car insurance policy that satisfies all your requirements by costing you a higher premium.

The above factors play a major role in deciding your premium for car insurance. You can check premium amount for your car by using car insurance premium calculator, which assist you in selecting the best, yet affordable policy for your car.