Top Ten things your insurers base your quote on?

As many of us know owning and maintaining a car is a costly business. Motorists are constantly forking out to keep their car on the road; from MOTs, to fuel and congestion charges, the expenses are never ending. Car insurance is different, it is tailored to suit your needs and cover you when you need it most. Regularly reviewing your policy can mean that you can find areas where you can make savings. But what do insurers factor in when quoting your premium?

1.    Vehicle – an obvious one but your insurance premium will be reflected by the type of vehicle you have. If you have a gas guzzling Range Rover, you’re going to be paying more on your premium than someone who drives a 1 litre Renault Clio. If the ongoing costs of motoring are getting too much for you, then downsizing to a more economical car will not only save you money on your insurance but also your tax and fuel bill.

2.    Annual Mileage – How far you travel and what you use your vehicle for play a part in deciding your premium. If your job involves you travelling hundreds of miles every week, the likelihood of being involved in an accident is a lot greater than someone who only travels 5 minutes down the road a couple of times a week. Calculating, even approximately, what your annual mileage actually is rather than guessing 15,000 for example can save you pennies and you may surprise yourself. Your MOT certificates carry your mileage at the time of the MOT, so subtract last years figure from this years figure.


3.    Excess – The higher your voluntary excess, the lower your premium will be. However it’s important to remember most insurers impose a compulsory excess on most policies so make sure you total your combined compulsory and voluntary excess to ensure that should you need to claim you can afford it. Nobody wants to pay more than necessary, but your insurance policy is there to protect you and your vehicle so make sure you set your excess at a sum you can manage or you could find yourself worse off if you are involved in an accident.

4.    Occupation – Your occupation has an effect on your premium but there is no way we can all change our jobs in order to get a cheaper policy. However amending your job title slightly could make a small difference i.e. a journalist can also be described as a writer or editor and a press officer could be described as a manager or office worker etc.


5.    Age – Your age will certainly have an impact on your policy. It has been statistically proven that younger, inexperienced drivers are much more likely to have an accident than their older more experienced counterparts. Therefore, insurers cover themselves against this risk by charging higher premiums. If you are a young driver, you can lower your premium by adding an older driver as a second driver on your policy. Although beware of fronting which is more commonly known as a policy being taken out in an older drivers name with the younger person as a named driver.  Although this sounds innocent enough, it is in fact illegal and if you are caught out by your insurer your policy will be invalidated.

6.     Car Modifications – modifying your car may mean they look cool but as far as the insurer is concerned you’re an increased risk. Your car will be much more appealing to a thief and modifications will mean the car can go faster and will be an increased risk of being in an accident.


7.    Driving History/ No Claims Discount – Good drivers are rewarded when it comes to policy renewal with a no claims discount if they don’t make a claim. It is an effective incentive to drive safely.

8.    Pay Monthly Vs Annually – Paying your car insurance monthly might seem easier than finding a lump sum but when you consider that pay monthly means over the course of the year you could end up paying between 10-20% more on top of your premium than if you paid the premium in a lump sum.

9.    Accident / Conviction history – Unfortunately, this is something you can’t avoid. Your driving history is a key indicator to the insurer of what kind of risk you are as a driver.

10.    Best Value Policy – using a price comparison site is an excellent way to ensure you are getting the best value insurance cover for your vehicle.  You can include various added extras to your policy to ensure you have that all round tailored policy. However, you should make sure you read your documentation to ensure you are not duplicating certain areas of your cover i.e. breakdown cover, legal cover etc. It may be the case that you already have these covers as a standalone or as part of a packaged current account. Also if your circumstances change, i.e. your occupation or the use of vehicle, then at renewal ensure these changes are made to your policy, the smallest changes can make a big difference to your premium.
 

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2010-03-25 14:15:52 © Moneyextra.com