Getting your vehicle insured is necessary as per the laws in many states. With a large number of policies available in the market, you may find it difficult to choose one. But do you know how your policy premium is decided? Your Insurance company may use statistical analysis based on the following factors to decide the cost of your premium.
1. The Make And Model Of Your Vehicle:
The make and the model of your vehicle is the foremost thing that the insurance companies look into. Your vehicle is evaluated on the basis of this.
2. Type Of Cover You Opt For:
You may choose a comprehensive cover policy, or an injury policy, or a collision policy. Whichever policy you choose makes a difference in the cover costs and hence in the premium you pay.
3. How Old Is Your Vehicle:
As simple as it can be stated, the older your vehicle, the more you may end up paying the premium. The older vehicles require a lot more care and are easily prone to breakdown.
4. Your Age, Gender And Your Occupation:
Your age, gender (female drivers may be offered discounts), and your occupation help the companies evaluate your potential to pay the premium. The companies evaluate your disposable income based upon your age and your occupation.
5. What Purpose Do You Use Your Vehicle For:
If you are using your vehicle for commercial purposes, you may be required to pay more than a conventional user. This is because commercial vehicles depreciate more than leisure or family use vehicles.
6. Your Driving Record:
A bad driving record, including accidents and charges, may cost you more on your insurance policy. It is obvious that a bad record reflects your driving habits and the companies don’t want to be at a loss if they cannot make any profit. If you have been into an accident then you may require a personal injury lawyer to help you claim your expenses. Notably, this is only possible if you are not found to be guilty of the accident.
7. Your Health Condition:
You may have to pay a little extra on your injury or comprehensive policy if you suffer from any severe ailment.
8. Where Do You Store Or Park Your Vehicle:
Whether you park your car inside a garage or do you park it on the street, it makes a difference on your premium. Typically, a car parked inside a garage is safer than the one parked on the streets. You can easily make out why would you have to pay more if you park your car on street.
9. How Many Miles Do You Drive Annually:
If your annual mileage is higher than the typical mileage of a car user, you may have to pay a lot more than the typical user. This is because the more you drive, the more your vehicle demands care and maintenance, and of course, it depreciates more as well.
Knowing how your policy premium is calculated, you can easily compare and decide between different policies. So next time you look for motor insurance, make sure that you estimate your premium beforehand using these points and avoid being fooled by the insurance companies.
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