The amount that you receive as a motor insurance quote from your insurance company will reflect how risky you are as a driver. It also indicates several other aspects associated with your vehicle that are carefully calculated by the insurance provider before offering you the quote. Listed below are some of the key factors that determine your motor insurance premium:
- Your profession – The occupation of some people demand that they spend a lot of time travelling in their vehicles. This would drive their motor insurance premium up, as they are at risk for being involved in an unpleasant situation on the road.
- Your age – Age of the driver is one of the primary factors that insurance companies consider when calculating motor insurance premiums. It is assumed that younger drivers are more risky on the roads and may also be less experienced. Hence, drivers aged between 17 and 25 years will generally attract higher premiums.
- The make and model of the car – The type of car you drive will have a bearing on the amount you pay towards motor insurance. In line with this, there are a couple of things you should evaluate before buying a new vehicle:
- Cost of the car – If you are looking to buy a high-end model, you should be aware of the fact that if it is stolen or completely damaged in an accident, you will have to spend a lot of money for the repair work. Expensive cars also have parts that are pricier to replace.
- Engine capacity – Vehicles with greater engine capacity attract higher third-party liability premiums. This increases the total cost of insurance as well.
- Customisations – In case you make any modification to your car, you should inform the insurance company of the same. The insurer will accommodate the changes under the coverage of the motor insurance policy and enclose an endorsement in the policy documentation. There may be a revision in the premium amount as well.
- Your area of residence – The locality where you live in and the use of the vehicle has a bearing on its insurance premium. If your place of residence is particularly notorious for thefts and other such crimes, then it is highly likely that you will be expected to pay a higher premium for motor insurance.
- The way in which you use the vehicle – The more you drive, the chances of getting involved in an accident will also be higher. If you are someone who uses the vehicle regularly, then you may have to pay a higher premium on insurance than an individual who keeps it parked most of the time. Hence, your annual mileage is considered by motor insurance companies while deciding on the premium.
- Your driving history – If you have been a diligent driver and have not raised any claim in a policy year, the car insurance company rewards you with a No Claim Bonus (NCB). This is a very attractive bonus, as it offers you a reduction in insurance premium at the next renewal.
- Voluntary excess – This is a deductible that a car owner opts for at the time of policy inception. If you select a high value for voluntary deductible, the premium on your car insurance will go down. However, you should ensure that you select a voluntary deductible value that you can afford to pay at the time of a claim. In case you do not choose a voluntary deductible, the insurer will pay you almost the entire claim amount. However, you will be paying a higher premium towards the policy.
- The type of motor insurance you purchase – There are two types of motor insurance policies that you can buy:
- Third-party liability insurance
- Comprehensive insurance
