Age and Driving Experience
Age is the most crucial factor companies consider when calculating car insurance. Most companies assume that young drivers have less experience and have higher risks of getting involved in accidents.
People with many years of driving experience have fewer risks of accidents on the roads. That’s why their insurance premiums are much lower than young drivers. For example, drivers aged over 40 years enjoy the cheapest rates on the market.
UK insurance companies consider people aged between 17 and 24 as young drivers. Likewise, insurers consider people aged over 70 as older drivers who have higher risks on the roads even with many years of experience. The reason is the health issues of older people that can increase the risk of accidents. It means higher premiums are directly proportional to age and accident factors.
Location
Insurance companies consider the location to calculate people’s insurance premiums. The company will look at your location and analyze crime level, road conditions, and the number of claims made for that area.
For instance, if you reside in the countryside, you will drive on quiet or less busy roads than those who live in an urban area. It means your car is at a low risk of being stolen in a small village or town.
Car Insurance Group Rating
UK law requires insurance companies to assign group ratings to all new cars to calculate insurance premiums. It tells the company about the expensive and cheapest cars. The group rating is based on various factors, such as the sale price, security level and performance, price of common parts and repair work, and emergency brake system.
There are 50 groups for car insurance, and the lower the rating, the cheaper the car is to insure. Bear in mind that your car’s group rating can change over time. For instance, if the company finds out that a particular car model has a higher number of accidents, it will increase the group rating.
Level of Cover
UK car insurance companies use three cover levels: third-party, third-party theft and fire, and comprehensive covers. The first one is the minimum level of cover requires to be on the roads in the UK. The company will cover you for damages caused to third-party cars or properties if you are found at-fault. However, the company won’t cover damages to your own vehicle.
The second one is the same as the first level of cover, except for covering your car from theft, damage, and fire. On the other hand, comprehensive coverage refers to the highest protection level to cover your own vehicle if vandalized or damaged.
Claims History
Claims also affect the premium price, and more claims mean increased premiums. That’s why the insurance company will figure out the number of claims you have made in the past. Most often, companies consider claims made within the last 3-5 years to see the probability of making another claim. Other factors companies analyze while calculating insurance premiums are:
Car make and model
Use and mileage
Car security methods
Your Occupation
Final Words
Having car insurance in the UK is required by Law. If you are an at-fault driver, the car liability coverage on your policy will help you pay for covered losses, such as medical bills, vehicle, and property damage that results from the accident.
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