Car insurance is a form of insurance which is done to protect the automobile from unforeseen risks. It is also called as auto or motor insurance. In simple language, one buys insurance to get protection against the losses incurred due to some unforeseen and unavoidable incident. Car insurance provides protection cover against theft and financial loss caused due to accidents or any other subsequent liabilities.
Usually, most of the car insurance cover for the insured party, the insured vehicle and third parties (car and people). What all is included and not included is dependent upon the type of insurance policy chosen by the client. And on the basis of this, the premium of the insurance is dependent. The premium is dependent on many different factors like the value of the car, type of coverage, type of car, etc. Consequently, car insurance gives the confidence to drive peacefully. In case of an emergency, it comes as a huge support to the insurance holder.
The market is flooding with car insurance companies and it is quite difficult to make a decision. Finding the right policy and insurer isn’t a cake walk. However, spend as much time as needed but figure out the right insurance policy which fulfils all your requirements and is cost-effective at the same time. It might seem complex but spending time on it now would save you a fortune later.
What are the factors that influence Car Insurance premium rates?
There can be many factors that can influence the cost of Insurance as per the UAE Insurance Authority. , car insurance costs have been increased for vehicle owners. While some of these factors you can control, there are many others that you can’t. Some of the factors that make up your car insurance premium are:
1. Driver’s age and experience
This is one of the most important factors which influence the premium. If the age of the insurer is below the age of 25 years with a driver’s licence, then your premium will be around 15-20 per cent higher. It might sound weird but it is a calculation based on a statistical correlation stating that the frequency of accidents and mishaps are higher amongst people who lack driving experience and fall within this age group.
2. History of accidents and fines
The drivers who have been involved in accidents or have received a number of tickets due to violation of traffic rules will have to pay a higher premium. If you’ve made claims in the past, them your insurance firm will charge you a higher premium. Alternatively, if you haven’t made any claims, then you’d be eligible for a no-claim bonus. This amount is deducted off your premium.
3. Age and coverage of the vehicle
Since a new car is more expensive to replace or repair, therefore, the insurer has to pay a higher comprehensive coverage to protect it against damage. An increased coverage results into a heavier amount for the premium for a new car. However, older cars can be secured with a more affordable third-party cover.
4. Features and type of vehicle
Another factor that influences the prices of the premium is the features and type of car. If it is a luxury car, then it would cost more in terms of repair or replacement. However, you can save yourself some money if your car comes with sophisticated safety features. Since this car is much safer to drive, you can ask for a lower premium in the final quote. On the contrary, vehicles with large engines attract a higher premium.
5. Additional features
You can always buy a little extra. It could include getting additional or optional benefits. There are many options like an international cover, roadside assistance, etc. You can just add them to your previous or existing policy.
