Factors Influencing Car Insurance Premium

ByGagan Avi Modi

Car insurance is one of the most vital elements of owning a car. Insurance provides peace of mind to the driver. Many consumers often wonder about the factors that influence their car insurance premium amounts. Premiums for automobile insurance are calculated after taking several factors into consideration. Some of the crucial factors that influence car insurance are listed below.

Details of the car: An individual needs to provide complete details of his/her car, while buying the insurance cover. These details include name of the car manufacturer, make and model of the car, registration city, year of registration, number of kilometers that the car has covered, list of previous owners, fuel type, previous claims etc. Once the insurance provider gets these details, they categorize the car into different risk types. This assessment is based on market trend for claims.

Driving Records: An individual's driving record plays a vital role in deciding the insurance premium. For e.g. an individual who has been penalized for rash driving, over speeding or has been involved in a car crash will pay higher insurance premium as compared to an individual who has squeaky clean driving record. Certain service providers may lower the insurance premium as they see a steady change in the customer's driving record. Reduction of insurance premium is solely at the discretion of the insurance company.

Presence of security systems: Cars that are protected by security devices like a car alarm, immobilizer, GPS tracking system, ignition locking systems etc fall in the low risk category. Owners of such cars pay a lower premium as compared to car owners who do not have adequate security systems in their car. Car owners must invest in installing sturdy security systems to deter thieves.

Marital status: Recent studies have shown that single or unmarried pay higher insurance premiums as compared to that of the married car owners. This is because that there is probability that such individuals are likely to over speed or drive rash vis-à-vis married people. This is however yet an exception in India.

Age: Owners who fall in the age group of 18 to 25 years fall in high risk category for driving offences. Such car owners will shell out higher premiums as compared to car owners in the category of 50+ years.

Location: Insurance companies categorize geographical locations into risk zones. Metropolitan cities witness more accidents as compared to small towns. Owners in a metropolitan will pay higher premiums as compared to the car owners settled in small or mid-sized towns.

Gagan Modi is the promoter of leading Automotive website Mycarhelpline.com and provides reviews, comparisons and tips to buy and sell car online at best prices.

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Insurance: Car-Auto
Gagan Avi Modi

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MLA Style Citation:
Modi, Gagan A.".".28 Feb. 2012EzineArticles.com.4 Mar. 2012 .APA Style Citation:
Modi, G. A. (2012, February 28). . Retrieved March 4, 2012, from http://ezinearticles.com/?Factors-­Influencing-­Car-­Insurance-­Premium&id=6909152Chicago Style Citation:
Modi, Gagan A. "." EzineArticles.com. http://ezinearticles.com/?Factors-­Influencing-­Car-­Insurance-­Premium&id=6909152EzineArticles.com© 2012 EzineArticles.com
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