Car Insurance: What Determines Your Premium Rate

Do you feel that you are constantly being charged unfairly huge sums of money on your car insurance? From your conversation with fellow motorists, does it always emerge that you are being charged higher car insurance premium rates than almost everyone else you ever talk to?

As it turns out, car insurance providers – as indeed the providers of all insurance products – price their products depending on what they see as the customer's risk profile. A person who seems to be at a higher risk of becoming victim to whatever it is that they are taking insurance against is therefore likely to be charged more for insurance than a person who seems to be at a lower risk of suffering from the same.

And in working out your 'risk profile' car insurance providers in turn look at a number of factors.

If you have a record of traffic-related convictions (even based on as 'simple' mistakes as obstruction and slight over-speeding), then chances are that you will find yourself paying higher car insurance premiums than drivers who have a record for being 'obedient' road users.

If you drive a car whose model has been associated with a higher frequency of road accidents or more gruesome road accidents, chances are that you will have to pay higher car insurance premiums than a person driving a 'safer' car – all the other factors held constant. If you drive a 'high' risk car, though, but take measures to make it safer – by way of installing air bags, anti-lock brakes and so on, you could find insurers more willing to offer you car insurance at better rates.

Younger people, perhaps due to hormonal action or 'sheer lack of wisdom' have been noted to be – on average – much more 'reckless' drivers, with older drivers being considered 'lower risk' profile drivers. It should therefore not come as a surprise when all things held constant, your friends who are above 50 years of age end up being charged lower car insurance premiums than you, if you happen to be below 50.