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FAQ: What Determines My Car Insurance Premiums?

By: Garry Crystal - Updated: 7 Oct 2012 | comments*Discuss
Car Insurance Premiums Car Insurers

Car insurance premiums are based on the risk that the driver poses to the insurance company. Insurance companies do not like paying out money, and the higher the risk of this happening the higher the premiums will be.

How Does My Age Affect Insurance Premiums?

Driver age is one of the major factors when it comes to determining insurance premiums. Although it may seem unfair, drivers under the age of 25 and over 65 do pay higher premiums on their car insurance. Insurers claim that inexperienced drivers and older drivers are likely to make more insurance claims. A recent government equality bill has an exception clause that still permits insurers to use what seems like age discrimination. One way to limit the age related premiums may be for younger drivers to drive less powerful cars.

Does Size Really Matter to Car Insurers?

The size of the car engine will be a factor in increased car insurance premiums. Powerful cars lead to more accidents according to the insurance companies. Another factor that will raise premiums will be the age of the car, the newer the car the higher the premium. Cars with soft tops are more likely to be broken into meaning increased premiums. Modifying a car is another way to increase those car insurance premiums.

Why Does Where I Live Affect the Insurance Premiums?

Crimes figures in the area where the driver resides will be taken into account by insurers. Local area figures such as crime rates, accident statistics and car theft will all make a difference to how much the insurance increases. But there are factors that can help offset the local crime rates. If the car has secure parking or if good security devices such as an immobiliser are fitted to the car then this should help to decrease the premiums.

Will Insurers Take My Driving History Into Account?

Insurers will be interested in the customer’s driving history. Drivers with violations such as speeding or drink driving can expect to pay higher premiums. Drivers with a clean licence should not be expected to pay as much as those with convictions. Drivers with a clean driving history who are then caught speeding can expect to see their premiums increase. This can also lead to losing a no claims bonus.

Does Sex Matter to Car Insurers?

According to government figures, 92% of driving offences in the UK are committed by men. Plus, 98% of convictions for dangerous driving offences are committed by, you’ve guessed it, men. It does seem that women are generally acknowledged to be safer drivers than men, although cheaper car insurance for women is an issue that hasn’t gone unchallenged. A recent debate in the European Union took place regarded gender discrimination and insurance companies. The insurers claimed that this discrimination was based on statistics and was not about discrimination.

Why Do Women Pay Decreased Insurance Premiums?

The safety aspect is a major factor in women paying decreased premiums compared to men. This does not mean that women are involved in fewer accidents than men. It does however mean that the accidents that women are involved in tend to be less serious in nature than car accidents involving men. Women drivers are also slower drivers than men and tend to be more careful, especially inexperienced women drivers. All of these factors, backed up by the insurer's statistics are the reason women can benefit from decreased car insurance premiums.

Can My Job Affect My Car Insurance Premiums?

The job a driver has can definitely affect their car insurance premiums. Insurers will regard some jobs as having a higher risk. People who have stressful jobs with long hours and people who clock up a lot of miles in their vehicles may have to pay increased premiums. Spending a great deal of time on the road can also increase stress and can lead to accidents. It’s not uncommon for people to ‘tweak’ their job titles a little to avoid the increased premiums.

Is There Any Point Shopping Around Between Insurers?

Absolutely, the insurance business is highly competitive and prices between insurance companies can vary significantly. Insurers use a huge number of factors when calculating insurance premiums, and drivers should obtain a number of quotes to obtain the best price. There are also insurance companies that deal specifically for older drivers, women drivers and even that high risk category, the young male driver. Insurance comparison websites will be a good start when trying to find the lowest car insurance quotes on the market.

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