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How is car insurance calculated? When working out the price, usually known as the premium, insurers use details about your vehicle, about you personally and how you drive. This information combined, is then used to predict how likely you are to make a claim. So the more likely you are to make a claim, the more you’ll probably be asked to pay.

The AA has released information on exactly how car insurance is calculated in the video below:

Tip: Where you buy insurance will also make a difference, whether it’s direct from an insurer or through a third party or a price comparison website. 

The premium cost will be calculated by:

The Car

  • The current age and value of your car
  • The insurance group that the car sits in
  • Modifications to the car such as tinted windows can increase the premium whereas safety features (Autonomous Emergency Breaking) might lower it!
Your Driving Habits
  • Driving records, including penalty points, suspensions, and convictions, and previous claims
  • How much do you use your car
Your Location 
  • Where you live, if your local area has high crime rates, or you live near a junction know for accidents.
No claims discount:
  • This counts the number of years that have gone by without you making a claim.
The more years = the more discount Excess
  • This is the amount you have to pay towards any claim, made up of voluntary excess (set by the insurer) and the compulsory excess (set by you). If you chose a low voluntary excess it can raise your premium.

Tips On Getting Cheaper Insurance:

Buying a car in a lower insurance group, keeping a clean license and being carful how you modify your car can all help reduce the cost of your insurance. 

Here Are Some More Factors That Insurers Might Use To Calculate Your Insurance Premium:

  • Add-on policy features, such as a replacement car.
  • Legal assistance cover.
  • Windscreen cover.
  • Driving in mainland Europe.
  • Discounts, such as being a member of the Institute of Advanced Motorists.
  • Connected devices like a black box, telematics, or Car Genie.
  • Protecting your no claims discount.
So, when you’re shopping around for car insurance, it’s worth thinking about how going direct could affect what levels of cover you get. Always check what’s included in the price and that it meets your needs. Feel free to contact us for more information on our car insurance partners.

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