Calculating Motor Insurance Premiums

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:

1. The factors which determine your car insurance premium, and
2. 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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