Factors that will affect your car insurance premium

What is car insurance?
Insurance for cars in complusory in the UK. You are required by law to have a policy to cover your liability to other road users. Car insurance originated in the field of law in 1930 when legislation was brought in requiring every person using a motor vehicle on the road in the UK, or permitting others to use that vehicle, to have a car insurance policy. At the very least this needs to be a third party personal injury policy.

Your insurance premium will be determined by a number of different factors relating to you, the car, and how you drive it!

1. Policy Type: A comprehensive insurance policy is the most expensive but will provide you with compete cover on your car.
2. Age: The younger driver you are the more inexperienced you are considered to be by the insurance companies and consequently the higher the premium will be.
3. Group Rating: If your car is a Ferrari it will be fast and catch everyone’s eye. For this reason it is considered high risk and will therefore cost more to insure.
4. Modifications: If you like to modify your car with additional mechanical or bodywork features it will increase your insurance premium.
5. Car's Stationary Location: If you have a garage, use it. A garaged car, or one kept on a driveway will result in significantly lower insurance premiums.
6. Your No Claims Bonus: If you are claim free after your first year of driving you will earn a no claims discount, awarded to you as a safe car driver. The more years you can accumulate the more reward you will receive, usually up to a 5 year maximum.
7. Location: If you live in the country you are far more unlikely to be a victim of crime compared to a city dweller. For this reason, those who live in a city will pay higher insurance premiums.
8. Occupation: Workers who spend time on the road travelling from one location to another will be affected by higher car insurance premiums. This is not to say the quality of driving is worse, in fact it should be better. It is the fact that you spend more hours on the road than most other users, which makes it statistically more likely that you will be involved in an accident.
9. Security: If you have an immobiliser, alarm, steering lock, and detachable stereo then use them. They will result in a significantly lower insurance premium, particularly in areas that have higher crime rates such as cities.
10. The Insurer: Some companies and brokers may seem to offer a lower insurance premium. It is vital that you check why this may be. For example, some companies will load the excess payable in the event of an insurance claim to £250 or more. You may have a reduced total amount payable for items such as stereo equipment, or will not receive a courtesy car if your car is involved in an accident.
11. Policy additions: If you have a number of people named on your insurance policy you are also covering their risk as well. To reduce your premium you can restrict the number of people on your policy.