Factors That Determine The Cost Of Your Car Insurance Premium

Car insurance is a necessary requirement that you are required to always have. However, the fact that it is a legal requirement does not mean that you should always go for the most affordable option. You should remember that insurance is meant to protect you, your car and your loved ones from claims as well as repair costs. Therefore, the goal when shopping for the ideal option should be to find the right insurance, which is affordable for you. Some of the things that affect the cost of your insurance cover include:

Risk factors: You should always remember that is a matter of risk. The riskier you are deemed the costlier the cover will be. When quoting the premium, insurance companies use several factors as the measure of risk. Generally, the younger you are, the higher the premium. Men are also considered riskier than women as they are more likely to make an expensive claim. Another factor that affects the cost of your premium is the car you are driving. Costlier cars will attract higher premiums.

Reward programs: Most insurers have programs that seek to reward careful drivers. However, to qualify for the program, you must build up no claims discount. Some of the most rewarding programs can even offer a 75-percent discount if you manage to get up to five years without a claim. If you feel that your current insurer is not rewarding you competitively, you can transfer your credit to a different insurer and hence, the need to be always looking for a better option.

Type of insurance: The insurance you choose will also affect the premium. The minimum legal requirement is the third party insurance coverage that pays for the damages sustained by a third party, their property and their car. The third party insurance will not pay any repairs to your car. The other common type of vehicle insurance is the third party and theft car insurance. In addition to the third party cover, the insurance covers your car in case it is destroyed by fire or stolen. The other type is the fully comprehensive cover that offers extra cover.


When choosing the best cover, it is important to compare what different insurance policies cover as well as their price. What is a standard cover in one insurance company may not necessarily be what is offered by another company. If you are looking to save money, you should avoid the extra options that do not need as they can tremendously increase the cost of your cover.