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What affects your car insurance premiums?

What affects your car insurance premiums?

Category: Car insurance

Updated: 07/11/2017
First Published: 03/07/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The pricing of car insurance is all about risk, and as you may know, there's a clear link between the age of a driver and the risk of making an expensive claim (we discuss this in more detail in our latest blog post). But, these aren't the only risk factors that insurers take into consideration, so here's a quick run-through of what else could come into play:

  • Address. There's a bit of a postcode lottery when it comes to car insurance, often due to things like crime rates and claims statistics for specific areas, and unfortunately, that means some addresses will be charged higher premiums than others.
  • Type of vehicle. A high-priced, powerful-engined, top-of-the-range vehicle will generally garner higher insurance premiums than a car that's more modest for the simple reason that it'll cost more to replace, so just bear that in mind before you put a down payment on a Ferrari. It's also worth remembering that certain modifications will add to the cost of a policy, while some will require a different kind of car insurance altogether.
  • Driving record. There's a reason you're always asked how many claims you've had in the last few years – a safe driving record with no claims will typically result in lower premiums, so always make the most of that no claims bonus. In a similar vein, too many claims, points on your licence and motoring convictions can see your premiums shoot up, so always drive as carefully as possible – it isn't just for safety, it's for your finances!
  • How you use your car. Do you use your car for commuting, leisure or perhaps a combination of the two? If you commute, you'll be driving at busy times when the risk of accidents is higher. Intrinsically linked to this is the number of miles you do – if you drive thousands of miles a month for work, you'll have to pay higher premiums for the extra amount of time you're on the road (and the higher likelihood that you'll make a claim).
  • Named drivers. This has the power to make your premiums rise or fall. If you're a younger driver, your premiums could be lower if you have an older relative as a named driver on your policy. Conversely, if you're a parent who puts your 18-year-old child on your policy, your premiums could rocket. The same applies to couples, one of whom has no claims while the other has points on their licence – it all makes a difference.
  • Occupation. Your job really can have an impact on the premiums you pay, and again, it all comes down to the perceived level of risk involved. Statistically, workers in some occupations are more likely to make a claim than those in others, be it through the stress of the job, perceived behaviour or the length of time in the vehicle. Journalists, electricians, salesmen and entertainers, for example, will typically pay higher premiums than teachers, solicitors or police officers. Strange but true!
  • Age. Check out our blog post for more, but in a nutshell, the younger you are, the higher your premiums will typically be. This is simply because younger drivers are statistically more likely to make a claim, and those claims are also likely to be more expensive than those from older drivers, so insurers need to up the premiums in order to counteract that risk.

What next?

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.