The more you know about insurance and how the industry works, the better prepared you will be, and the more money you can save.
The following are key factors that insurers use to determine the price of car insurance:
• Age: If you’re young, your risk of being in a vehicle accident is statistically much higher. You can’t do anything about your age, but some insurers may penalise you less than others.
• Claims history: Safe drivers are rewarded with lower insurance premiums. Your history of making claims will directly affect the cost of your insurance. The more you use insurance, the more your insurance will cost.
• Credit history: Insurance companies have determined that there is a direct correlation between your credit history and your risk.
• Use of vehicle: The risk for an insurer is much less on a vehicle used for private purposes than for a vehicle used for business purposes. The higher the risk, the more the insurance premium will be.
• Type of car you drive: Besides the value, various factors – like the availability of parts, the cost of parts and popularity among thieves – all play a role in determining the insurance tariff for a specific vehicle.
• Marital status: Married people historically are more stable drivers.
• Place of residence: Your postal code can have an effect on your cost of insurance. Insurance companies penalise you for living in an area that has a history of high theft, vandalism and so on.
Short-term insurance 101
October 17, 2017