How do Insurers decide what Motor Insurance Premium to charge?

Answer:

In calculating the Insurance Premium Insurers consider the following

• What type of car
• Who will drive it
• Where it is left overnight
• Usage
• Type of Cover
• Postcode

What type of car?

All cars are given an Insurance Group Rating based upon a Group Rating System. However Insurers do not always follow the rating they are therefore advisory.

The Group rating is based upon

• Likely damage and repair costs including availability of parts
• The value of the car
• Its performance
• Type of body shell
• Car Security

A list of Ratings is available from this link Group Ratings

If you are thinking about buying a new car or you are a young driver check the Group Rating before you purchase a vehicle.

Who will drive it?

Insurers will want to know who is going to drive the vehicle.

• If you have convictions for speeding particularly more than one you will probably find that you suffer a higher premium
• If you have a drink driving conviction you may find difficulty in obtaining insurance and you will have to pay a higher premium. You may also find that you have to pay a higher excess or there may be restrictions in cover. It is probable that these higher premiums will continue for some time.
• Your medical condition has an effect upon the premium. Check the link to obtain information concerning Medical Conditions. You have a responsibility to disclose any medical condition to your Insurers when seeking a quotation for motor insurance.
• Age has a significant effect upon premiums. Statistically younger drivers are more prone to accidents. See the navigation panel for advice for Young Drivers.
• All persons who are named under the policy must provide full details of their driving history convictions and medical history. If any named driver has any adverse information disclosed then the premium will reflect this risk.

Where is the vehicle overnight?

• Statistically vehicles parked on the Public Highway are more likely to be damaged than those kept in garages or driveways.
Usage

Usage ?

Insurers will want to know the vehicles usage>

There are three options

• Social Domestic and Pleasure including commuting to and from one place of work
• Social Domestic and Pleasure excluding commuting
• Business Use  by the policyholder for their own business to travel to and from more than one place of work and between places of work

Type of Cover? 

Third party

Third party is the minimum cover that is available. It complies with the Motor Insurance necessary under the Road Traffic Act. It covers loss or damage  to third party property (not your own vehicle)  and personal injury caused to other people including passengers also liability for accidents caused by your passengers it also covers liability arising from the use of a trailer or caravan attached to the vehicle.

Third party, fire and theft

In addition to the cover provided under Third party (as above) the Policy also provides cover for loss or damage to your own vehicle caused by Fire and Theft

Comprehensive

In addition to the cover provided under the Third party, fire and theft insurance a Comprehensive Policy extends to cover accidental damage to your own vehicle in the event of an accident.

In addition the Policy may provide additional benefits such as Personal Accident Benefits in the event of death or permanent disablement. Medical expenses, dental treatment. Loss or damage to personal property and audio equipment.

Third party is likely to be the cheapest premium however it may be sensible to obtain a quotation for comprehensive cover as well to compare.

Postcode?

Insurers will compare your postcode with their claims experience. Clearly vehicles located in a city are likely to pay greater premiums than those located in the country since they are more likely to suffer damage or claims.