Are you an Insurance Risk?
There are many factors that an insurance company considers before making the initial assessment as to wether or not they believe you (and your vehicle) are a high or low risk.
We shall start by listing the most important factors that depict your premium:
- Age of policyholder
- Gender of policyholder
- Annual mileage of policyholder
- Does the policyholder use the vehicle for business use?
- Are you looking to insure a performance car?
- Have you modified your car in any way (performance, looks or both)?
- Is your car desirable to a thief?
- Has your car got security devices fitted?
- Is the policyholder the only named driver?
- Where is the car located (crime area)?
- Where is the car parked at night?
- Has the policyholder any No Claims Bonus
- Has the policyholder had any accidents or claims in the past three to five years?
- Has the policyholder had any motoring convictions?
- How much Excess have you selected?
Age of the Policyholder
If you have recently passed your test and you are 17, an insurance company considers you to be a very high risk i.e. They expect you to be involved in a claim due to your lack of driving experience and maturity behind a steering wheel. The older you become, the lower your premium will too providing you make no claims or have none made against you. Be aware that if you are older and still maintain zero no claims bonus (you have just passed your driving test or been off the road or uninsured for a long while) Over 50’s policyholders usually gain high discounts due to their maturity and road experience.
Gender of the Policyholder
It is a known fact that female car insurance is cheaper than car insurance for males. This is due to the fact that females drive more carefully and slower tha males hence in an accident the damage is proved to be far less. There are specific car insurance companies just for females however it is wise to compare policies from various companies as they are not always the cheapest or the best.
Annual Mileage of the Policyholder
The average mileage of the UK policyholder is set around 12,000 to 15,000 miles. When a driver xceeds this they are becoming a greater risk to the insurance company by spending more time on the road. If you only drive 6,000 miles per year then it is well worth telling the insurance company theis information to receive extra discount.
Does the policyholder use the vehicle for business use?
Should you use the vehicle for business use (apart from driving to and from a place of work) ;- this again increases your chances of having an accident and subsequently increases your premium.
Are you looking to insure a Performance car?
Performance Car Insurance can prove to be very expensive as the insurance companies will aways consider fast cars to be a high risk for accidents and furthermore, theft. A performance car in conjunction with a young male policyholder or a policyholder with little driving experience or no claims bonus will present a very expensive yearly premium often unaffordable.
Have you modified your car in any way (performance, looks or both)?
Once you have modified your car, you must inform your insurance company as failure to do so will render your policy null and void. Should you increase your vehicles power the risks are that of a performance car (or even greater as the standard factory-built car is not designed for power modifications b the public). However when you change the appearance of your vehicle i.e. alloy wheels, trendy paintwork, bodykits and so on, the risk of vehicle theft becomes much greater and once more the premium is loaded.
Is your car desirable to a thief?
An insurance company considers a performance or modified car to be highly desirable to the likes of theft. They also have statistics available of thefts of certain types of vehicle so it is prudent to check with a broker which cars are less likely to cause a claim.
Has your car got security devices fitted?
Most modern cars that are in the upper class of their range are usually fitted with alarms and imobilisers as standard. This helps to reduce premiums. However should you decide to have extra security fitted such as a tracker then this results in lower risks to the insurance company (hence a lower premium for you) and gives you peace of mind knowing that you will always know the whereabouts of your vehicle.
Is the policyholder the only named driver?
It is often the case that the policyholder would require an extra (or few) named drivers on their policy to be able to drive their car as well. This will almost always increase your premium especially if the named driver(s) has little experience, is young or has had past claims or convictions. It is wise not to have additional driver on your policy if you want to keep control of spiralling insurance premiums.
Where is the car located (crime area)?
Insurance companies have a wealth of statistical information on all areas of the UK and their claim-rate i.e. if or not an area has a high theft or vandalism rate – this is decided by the policyholders postcode. It always helps if you can keep your vehicle garaged overnight which will entitle you to further discount. Unfortunately there is nothingelse you can do about this except move house to a low crime area or simply change your car for a model that is not likely to be stolen.
Where is the car parked at night?
As described above, your car is much safer kept in a garage overnight and an insurance company will reward you for this. The next best option is a driveway then finally on the road (the premium getting more expensive respectively). Be aware to always tell the truth to the insurance company as if you have declared you keep your car garaged overnight and it was stolen from the road, you may not be covered for any compensation.
Has the policyholder any No Claims Bonus
If you have zero no claims bonus then your premium will be set at the highest rate. Shop around as sme companies will give you an introductory 10-15% bonus which really helps your premium diminish. Lastly, drive carefully for the policy duration to gain extra bonus and discount for the following years term.
Has the policyholder had any accidents or claims in the past three to five years?
Any accidents or claims in the past 3-5 years will render you a greater risk to the insurance company sometimes even if the claims were not your fault! For minor accidents it is always worth considering not making a claim so as not to lose your no claims bonus or have to pay out your excess.
Has the policyholder had any motoring convictions?
Points on your license from speeding, drunk driving convictions and dangerous driving convictions will all have a bearing on future premium prices so be very aware of how you drive today could affect your pocket in the future. With the increase of speed cameras on todays roads and the sheer amount of tickets issued to innocent people who are not driving dangerously (just one or two miles per hour above the set limits) some insurance companies are taking little notice of speeding ticket offences.
How much Excess have you selected?
When you initially take out your policy with an insurance company, they will ask you what ‘Excess’ amount you require. Excess is the amount payable to the insurance company when a claim is being made and is usually deducted from your compensation payout. The more excess you select, the cheaper your premium but should you have a claim you will loose this excess amount from your final compensation.
All of the above are valid points on which an insurance company will assess your element of risk as a policyholder. Take note of thse points, consider them carefully and you can gain the car insurance quote and policy suited to your situation.
We hope this article helped you in making your decision!