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Calculating
UK Motor Insurance Premiums
As the search for the cheapest, best value-for-money car insurance continues,
just what factors determine the price you actually end up paying to insure
your car?
The
Underwriter | Factors Affecting
Premiums | Reducing Motor Premiums
With premiums
rising across many driver and vehicle sectors it makes a great deal of
sense to find out and know:
- The factors which
determine your car insurance premium, and
- The factors you
can influence, which could reduce your motor policy premiums
If you have
insured a vehicle before you may well be aware of the substantial differences
between car insurance quotes from different UK insurers and brokers. This
fact alone necessitates the first rule you need to follow to ensure you
get the lowest possible premium combined with the highest level of cover:
- It is in your interest
to shop around (online) for the best deal.
The
Role of The Insurance Underwriter
Underwriters help insurance companies figure out how much they
need to charge to make a profit. Car insurance companies are in the risk
business, only the risks they take are financial, not physical. Insurance
companies assume the risk for their customers' potential financial losses.
They do this at a
cost and with the intent of making a profit, which means they have to
set premiums high enough to limit their own risk while still keeping prices
competitive. This can be a precarious balancing act, and errors in either
direction can cost a company enormous sums of money.
Factors
Which Influence Motor Insurance Premiums
Listed below are the main factors which will affect your motor
insurance quote:
- Profession
- Marital status
- Smoking
- Gender
- Age
- Security
- No-claims bonus
(Expect No Claims Discounts
if you are a policyholder with a claim free record).
- Voluntary policy
excess
- Annual mileage
- Named drivers
- Vehicle type
- Modifications
- Driving habits
- Advanced
motoring qualifications (See - Pass
Plus and Advanced
Driver Training)
- Location
- Driving conviction
- Poor claims history
Reducing
Motor Premiums
Reducing your car insurance bill, or keeping the premiums in
check, doesn't mean you have to forgo the reassurance of dealing with
a secure company. There are many ways of tailoring the policy to provide
the cover you need at a lower cost:
- Choose
Your Car Wisely (see Car
Insurance Groups).
- Look after your
Vehicle (keep your car on your driveway rather than in the street, and
a much better one if it is locked away in a garage overnight).
- Limit The Drivers
- Select
The Appropriate Cover (Third
Party or Fully
Comprehensive)
- Pay The First
Part Of The Claim
- Protect Your No
Claims Discount
- Look
For 'Free' Insurance (Available on new car purchases)
- Look for Introductory
Discounts
- Add Security
- Last but
by no means least (see above!) - Shop Around!
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