Have you ever wondered just how the car insurance companies work out your quote and how they get to the quoted amount?.
Firstly, it depends on which company is quoting, and secondly there are certain factors that they take into consideration and these play a part in the total amount that they quote you. These factors include the type of policy you are looking for as well as the risk factors. The bottom line is the riskier you are the more you will have to pay. The reason being that you will be more liable to claim and the more liable it will be that they will have to pay out on your policy. Below are a few things that will determine your car insurance quote and that will affect your monthly premiums.
Depending on the value of the coverage of the policy that you want will determine your monthly premiums. Say for instance you want to cover your car for R100K instead of R80K, the insurance company will have to pay out more if something should happen, and that is the reason for a higher premium. Now that was the simple part. Next we get to the excess. This is the “participation fee” that is payable by you should you have an accident, and the insurance company pays the balance for the rest of the damages done to the vehicle (to find out more go to the section “car insurance and terms and conditions” on our website. If you are willing to pay more when you claim, your premiums will be less. You will find that the cheaper the car insurance is the more the excess amount will be for you to pay, make sure to compare this point.
The history of your driving/accidents and claims history
Your driving history has a big effect on the amount you will be paying on your cars insurance. If you have had a lot of accidents your premiums will automatically be higher because the insurance company will automatically assume that you will have more accidents.
Your personal details
This might seem unfair to you but the insurance companies look at your age, sex and your marital status when doing a quote. If you are a young single male your premiums will be higher than an older married man. And no, there is nothing that can be done to change this.
Believe it or not some cars cost more to insure than others. If your car is expensive, your premiums will be higher to cover the cost of the vehicle should anything happen to it. There is also the difference in premiums between sports cars and average cars. The sports car will have higher premiums because it can go much faster than other cars and will be more likely to be involved in an accident. Then you get the cars like the SUV’s and the luxury vehicles, which are more likely to be stolen, and thus will have higher premiums. So in order to get a lower premium try to choose a car that you will be driving carefully.
How safe is the area you live in
Some areas have a higher theft and accident rate. The premium is also calculated on the safeness of your residential area as well as the areas that you would normally drive in. If you can prove to the insurance company the safety measures you take to minimize these risks then you might be given a lower premium (e.g. parking your car in the garage)
How good is your credit?
If your credit score is not very good then insurance companies also take it as being a high risk policy and your premiums will be higher because the chances of them having to spend money collecting premiums are higher. This is the reason why they will request your credit records.
Other things to take into consideration
These things that insurances take into consideration might vary from insurance company to insurance company. Some of them include how old your car is, if you have taken extra driving courses and if you have had a lapse in your insurance (the times when you were not insured).
Many factors influence the cost of your car insurance quote, and some of these you can control and some you can’t. Please remember that it is never worth lying about something that you know will increase your insurance premiums. If you get caught out your policy will become invalid, or even worse be accused of committing fraud. As best you can, try to limit your risk factors, and remember to shop around online for the cheapest deals. If you want a new policy please fill in the form on the top left to get a few free car insurance quotes.