The premium for a car insurance policy is determined with the help of several factors. These factors help a motor insurer to judge the risk associated with your car. The greater the risk, the higher a car insurance premium gets. Take a look at some of the common factors that affect car insurance premiums.
Make and Model of Your Car
One of the most significant factors that determine your premium is the make and model of your car. Luxury cars are generally more expensive to insure because they have high repair costs and replacement values. However, certain models in luxury cars are cheaper to insure than others because they are safer on roads and have less theft tendencies. Apart from this, various other factors like size, age, safety features, engine power, etc., can also impact your car insurance premium.
Age & Gender of Policyholder
Your age and gender are also among the determining factors for calculating your car insurance premium. Statistically speaking, women drivers can be considered safer than men drivers because they tend to follow traffic rules diligently. Along with this, they file fewer claims than men drivers do. This is why many insurers provide lower premiums to women drivers than men drivers, who are considered more prone to accidents and rash driving habits by insurers.
Your credit score
All other things being equal, drivers with good credit scores tend to be less risky and file fewer claims. That’s why many insurers use credit history as a rating factor when setting premiums.
The car you drive
Cars differ in price for many reasons, including their safety ratings, repair costs, types of parts and overall desirability on the used-car market. All those factors affect the cost to insure them. If you’re looking for a new car and want to know if it’s cheaper to insure, take a look at our list of most popular cars for 2022 shoppers. It ranks models based on the average annual premium for each one in three tiers of coverage: liability only; liability, collision and comprehensive; and full coverage (liability, collision and comprehensive plus uninsured motorist protection). The list will help you decide what kind of car is right for your budget when it comes to insurance costs.
Here are some tips to keep in mind when taking out car insurance.
Compare car insurance policies
It is important to compare car insurance policies before taking a decision. There are many online sites that offer car insurance comparison services, which can help you compare prices, features and benefits of different insurers.
Check the premium amount
Check the premium amount you need to pay for the policy you want to take and see if it suits your budget or not. You can also check and compare the benefits provided by different insurers against their respective premium amounts.
Consider your requirements
Every insurer offers different types of add-on benefits, so consider your requirement and then go for a policy that suits your needs. Sometimes, people end up buying unnecessary add-on covers, which not only increases the premium amount but also does not provide any additional benefits at the time of claim settlement.