The following are just a few rating factors that insurers use to calculate an insurance rate:
- Type of Vehicle – The make and model of your vehicle will affect your premium calculation. High powered cars, luxury vehicles, and vehicles that are seen as “high target” may command a higher insurance premium than less expensive and economic vehicles.
- Age – Age is an important factor when insurance companies calculate the cost of a car insurance premium. Young drivers under the age of 25 and seniors over 70 typically pay a higher insurance premium because they may be viewed as high-risk drivers in the eyes of the insurance company. A loading percentage is added onto the base line premium and this is determined once the date of birth is entered.
- Driving experience – Most car insurance companies will ask you about your driving record to help determine the premium. You may have been a named driver on a policy previously which can allow you to qualify for some discount. Similarly, if you are moving from one Insurance Company to another that will reflect on the premium.
- Profession and Use – Companies will sometimes ask how many miles a year you drive. Certain levels allow for a discount but the higher mileage, the more risk. Also, some professions are seen as more high risk than others.
- Convictions – The better your driving record is, the lower your premium. If you have had serious traffic convictions, it is likely you will pay more than if you have a clean driving record. Of course, all insurance is based on the principle of Utmost Good Faith so you need to declare these convictions at the quotation stage or risk non-coverage in the event of a claim.
- Claims History – When calculation your insurance premium, the insurers will take into account the number of claims you have made previously. This can result in a substantial discount on your premium.
- Type of Coverage – You need to know whether the age or type of your vehicle warrants the highest insurance coverage. The cost of filing a claim on an older vehicle may raise your Insurance premium rates more than paying for the damage yourself. Consider just liability coverage if it’s am older vehicle that cost no more than the deductible itself.