We all know that we need motor insurance, but what we may not understand the basis upon which our insurance policies are priced. Understanding what the rates you are quoted are based on can be baffling and leave you feeling taken advantage of. Most insurance companies do not outright explain what their motor insurance premium prices are based on, but with a little research you can discover what criteria they use and ways to save money by addressing this criteria. No one should accept motor insurance quotes without knowing why they are receiving those rates. Before you purchase any insurance plan, you should take some time to familiarize yourself with what affects your insurance rates.
Insurance prices are based on a number of factors, some of which include:
Your age-Yep, that’s right - your age plays a part in the price you pay for
motor insurance. There aren’t too many industries in which your age can be legally used for or against you, but when it comes to insurance, it plays a large part in whether you’ll be paying a typical rate or a higher than normal one. Although age is not always the best indicator of safety and responsibility, it is normally accurate in predicting the probability of a driver being involved in an accident. Young drivers are most likely to be involved in an accident, which is why car insurance for younger drivers is often more expensive.
Your location-Where you live is important to motor insurance companies for a number of reasons. First, if you live in an area where there is high traffic, a high number of incidents of crime, or live a long distance from your place of employment then you may be considered to be a higher risk than other drivers who live in remote or low traffic areas, live in safer areas, and reside close to their jobs. While you can’t necessarily control all of these factors you should be aware that they do affect the cost of the quotes you receive.
The age and model of your car- If you’re a speed lover or have to own the latest cars, you can expect to pay more insurance than almost all other
motor insurance purchasers. The more expensive your car is and the faster it goes, the more it will cost your insurance company to insure it, which means that they’ll more than happily pass these expenses right along to you. You can however lower these costs somewhat by having a car alarm installed and of course keeping an impeccable driving record.
Educating yourself on what determines the motor insurance rates you receive can provide you with not only insight but also prevent you from being taken for a ride when purchasing motor insurance.
1Cover is one of Australia's cheapest online providers when it comes to
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insurance for car accidents. Article posted by Article posted by Peter Smyth of 1Cover.
