How Premiums Are Calculated
Factors taken into account in costing your insurance
include who will drive, the type of car, where it is kept, the
uses to which it is put, and the type of cover required. When
buying motor insurance you must give the insurer full information.
Drivers
The policy may only cover driving by yourself or specified people,
or it may allow driving by any qualified person with your permission,
possibly over a certain age limit. Your insurers will want to
know about anyone who is likely to drive - particularly their
age, experience, driving record and occupation.
Your Car
Family cars with moderate repair costs are cheaper to insure than
large or powerful cars which can be expensive to repair. Each
model is given an insurance group rating. This system is described
later in this Information Sheet. Older cars often attract discounts
from comprehensive insurance premiums.
District
Insurance claims are more frequent in urban areas so motorists
in cities usually pay more for their insurance than those who
live in the country. The place where the car is kept is a rating
factor, so tell your insurers if the car is not kept at your home
address.
Use
Your policy and certificate set out the uses for which your car
is insured. For example, if you or any authorised driver want
to use your car in connection with work, make sure that your policy
covers this.
No Claims Discount
Policyholders with a claim free (not blame free) record normally
qualify for a premium discount. Scales do vary but usually range
from 30% for one claim free year up to 60% or more after four
or five years.
"Protected Discount" policies are often available for
motorists with maximum discount. For an extra premium, a number
of claims are allowed without affecting the discount. Typically
two claims are allowed in a three to five year period.
