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Factors affecting your car insurance
Factors Affecting Your Car Insurance:
Where Do The Costs Come From?

If you drive a car, then you need car insurance, but the cost of insuring your vehicle can sometimes seem high for even an average car, so where do the costs of car insurance come from? There are various factors affecting car insurance rates, all of which are assessed and established by the UK insurance industry to help it work out its costs. For example, the industry will use the actual vehicle, the way it is used, its security, and its driver as key factors affecting car insurance.

It's a good idea to think about the factors affecting car insurance not just because it can help you understand how your policy costs are put together, but also because understanding the factors affecting car insurance rates could actually help you save money. Let's take a look at some of the key factors affecting car insurance rates:

Age

The driver's age is one of the factors affecting car insurance rates that you are charged. In general terms, younger drivers will be charged higher premiums because they are less experienced and more likely to have accidents. Older drivers will be charged less because they have more driving experience and safer driving statistics behind them.

Top Tip: If you are a young driver, look at taking a PassPlus driving course as this might get you a discount!

Car

The car you drive is one of the primary factors affecting car insurance rates. Cars are classified into 20 groups by the industry with 1 being the lowest (and cheapest to insure) and 20 being the highest (and most expensive to insure).

Top Tip: Next time you are looking to change cars, look at the group your car is currently in, and think about moving to a lower group to get cheaper premiums.

Features

A fully comprehensive insurance policy will cost more than one that only covers third party fire and theft. The more features an insurance policy has, the more it will cost, as features are one of the factors affecting car insurance rates.

Top Tip: Think about getting rid of features you don't need; there's no point paying for them!

Location

One of the main factors affecting car insurance is location; some areas will incur higher costs than others. For example, it will be more expensive to insure a car in a town than in the country as more claims tend to be made in urban areas.

Top Tip: You could move (but this might not be feasible) to get cheaper costs, but you can cut the cost of urban insurance by using a garage and/or security products.

Security

Cars with alarms, immobilisers, and tracking systems (and those that can be stored in a locked garage) may put off car thieves, so cars with these kinds of security systems in place will have lower premiums than cars with no security coverage. Security is definitely one of the factors affecting car insurance rates.

Top Tip: Think about putting security devices into your car, as you'll get lower insurance premiums.

Of course some of us may not be able (or willing) to make changes according to the factors affecting car insurance. Few people will, for example, find it cost effective to move from a town to the country just to cut down on their car insurance costs! But, if you know about the factors affecting car insurance rates you can take specific measures to try and cut down on your costs. At the very least, knowing the factors affecting car insurance and the factors affecting car insurance rates will help you understand your car insurance premium better. 

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