What Determines Car Insurance Price?
June 18, 2018
When you are thinking about car insurance price there are a lot of factors involved to determine the costs. We will take a look at all the factors that are added in your car insurance quotes.
The estimated value of your car
One of the first things car insurance companies look at when they make the insurance quotes is the value of your car. A car that is less valuable or cheaper will have a smaller quote, where a more expensive car will have a higher quote. Older cars generally have smaller prices. The car insurance prices needs to cover the total replacement value of your car in case it is totalled or stolen. Budget car insurance has a plan available that will replace your car with a younger model or one with a lower kilometre reading. You will often find online cheap car insurance based on the value of your car alone. Sometimes women stand to get cheaper insurance than men.
Third party cover
The next thing the companies use to estimate the car insurance price is the third party cover. Third party cover is set in place to cover the costs of the other party involved in the accident, be it damage to their car or property. The use of third party cover is usually only applied if you are found to have caused the accident. If you get car insurance quotes online, they often include this kind of cover.
After the value of your car and third party costs are determined the next factor to be added in is risk. Most of the companies have a list of high risk cars. These are cars that are more likely to get stolen or hijacked. King Price car insurance has a plan where the monthly car insurance price are lowered as the risks lowers.
The age of the driver
The age of the driver is also noted in the costs of the insurance. Take for instance an 18 year old young man that has just got his first car. Young people are more prone to be reckless drivers and because of their lack of driving experience they are often more at risk to cause accidents. Younger or less experienced drivers often pay more for their insurance as they pose a higher risk.
Where you live is another risk factor that is used to decide the cost of your car insurance price. People living in rural areas are less likely to have accidents than city dwellers. This is simply because there are more cars in the city. With more cars around the chance of an accident happening is much greater.
Car Insurance Price Summary
There are a lot of factors involved when companies decide what they are quoting for car insurance. These factors include; the value of your car, third party cover, location, age of the driver and the risks involved. When you look at all these aspects that is used to calculate the cost of insurance it is easy to understand why the car insurance price is often higher than what you might have expected.
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All info was correct at time of publishing