How car insurance premium is calculated

How car insurance premium is calculated.

The make, model and year of your car, the records of the people who are insured to drive it and where you live are all considered by insurers when setting rates. You can reduce your premium by making a wise decision.

A car, whether right off the assembly line or new to you, can be one of the biggest investments you can make. Insurers assess a number of factors, including your driving record, when calculating your premium. Your insurance rates are also partly determined by the type of car you drive. In general, the harder your car is to steal and the less expensive it is to repair, the less you pay for insurance.

Need to insure a car?

Insurers consider many factors when calculating your car insurance premium. Buying or leasing a car with a low-cost insurance rating is one way you can control costs.

The "Worst and Best Ten 2000-2018 Models" reports on the relative claim cost of cars by accident type. Also consider the cars rated the safest by the Insurance Institute for Highway Safety.

Getting an Insurance Quote? Here's how to lower your premium.

Provide your insurer with the Vehicle Identification Number or VIN of your car. Some cars are more expensive to insure. Without the correct VIN, you may be quoted a premium for a different -- more expensive make or model -- car. To save money, you can also:

1. Increase your deductible (ie, your share of the cost of the claim)

2.  Drop collision coverage on an old car 

3. View package deals for your car and home 

4. Install an approved theft prevention system in your car For additional tips, check out our Top 10 Ways to Help Lower Your Rates.

A good driving record can reduce your premium.

License suspensions, parking tickets and convictions for driving offenses all add up to higher car insurance premiums. In fact, after being convicted of a driving offense, it can take up to 6 years for your records to be considered clean again by insurers. Over the years, building a consistent accident- and conviction-free driving record can help lower your premiums. You can also:

. Adjust how often you use your car 

. Take Public Transportation to Keep Your Annual Kilometers Down 

. Exclude high risk drivers from your policy

You can increase your premium where you live

Did you know that the cost of claims varies in urban areas? Higher density equals more risk, more accidents and more theft. For example, using 2011 data, the average claims cost per vehicle in one city was 25% higher than in a neighboring city.

While there are good drivers in every city, on average, average claims cost in some areas more than others. And as the cost of claims increases, so do the premiums.

How Tidy and Telematics Can Save You Money

Insurers use the Canadian Loss Experience Automobile Rating (CLEAR) system to assess the likelihood that your car will be included in a claim and what it will cost. Current data for each make, model and model-year of the car is used to calculate expected and actual claims damage experiences. Choose a car with a low claim risk and a clear number and you can expect a lower premium.

Source by internet.

Created by MOHAMMAD SHOAIB.