Have you ever wondered how a car insurance company calculates your insurance premium?
According to a recent revision introduced by the UAE Insurance Authority, car insurance costs have been increased for vehicle owners. You may not know this, but there are a number of factors that influence the rate of your car insurance. While some of these factors may not be in your control, there are others that you can. Here are some factors that make up your car insurance premium.
1. Driver's age and experience: You may not know this, but one of the factors that influence your car insurance premiums is your age. If you are someone below the age of 25 years with a driver's licence that is less than a year old, then your premium will be at least 15-20 per cent higher. This calculation is based on a statistical correlation stating that the frequency of accidents and mishaps are higher amongst people who have lack of driving experience and fall within this age group.
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2. History of accidents and fines: Drivers who have been in accidents or have received a number of tickets in violation of traffic rules will find themselves paying a higher premium. Your insurance firm will charge you a higher premium if you have made claims in the past. At the same time, claiming no insurance makes you eligible for a no-claim bonus that is deducted off your premium.
3. Age and coverage of the vehicle: Needless to say, since a new car is more expensive to replace or repair, you would need a more comprehensive coverage to protect it against damage. An increased coverage means that you will have to shell out more to pay for your premium for a new car. However, older cars can be secured with a more affordable third-party cover.
4. Features and type of vehicle: Luxury or pricier cars cost more in terms of repair or replacement, especially if they have expensive spare parts. However, insurers reduce premium if the car comes with sophisticated safety features. Since such a car is safer to drive, they charge lower premium in the final quote. At the same time, vehicles with large engines attract higher premium.
5. Repairs done by agencies or non-agencies: Repairs are an important point that should be added to your insurance. Your car can either be repaired by your car's official dealer (also known as agency repair) or by a non-agency that is approved by your insurance provider. The option of agency repairs can be included in your insurance cost by paying an additional cost. However, be sure to check if it is already included in your policy.
6. Amount payable by the insurer: Also known as deductible or excess, this is the amount that agree to pay yourself in case of an accident caused by you. You can reduce the annual premium by agreeing to pay a higher excess amount or vice-versa.
Additional features: You can pay a fixed extra amount for any other additional or optional benefits, such as international cover, roadside assistance, etc, which you would like to add to your existing policy.
By Ambareen Musa