What does the price of car insurance depend on?
The headline that starts this post seems like an easy-to-answer question, one of those that would be asked if you were a child in the first year of ESO or if you participated in a television contest that distributes a lot of money in exchange for almost nothing. A clear answer will soon come to mind for the vast majority of our readers: the price of car insurance depends on the coverage, on what it is going to be.
Factors that influence the price of car insurance
However, this being as obvious as it is true, there are numerous factors that influence the price to be paid by anyone who takes out car insurance. As we will see, insurance companies take into account practically all aspects when assessing the amount of the premium that each client must pay. We detail them below.
The risk profile, essential
The companies study each particular case in order to study the risk profile, taking into account many aspects in order to determine whether there is a priori greater or lesser probability of loss, an aspect that will decisively affect the price of the policy by means of a very simple rule: the higher the risk, the more expensive the insurance will be (or, if we want to approach it in another way, the less likely it is that a mishap will occur, the cheaper the premiums to be paid by the policyholder).
Broadly speaking, to assess the price of car deductible insurance, two main aspects are taken into account. One of them is the characteristics of the driver, analyzing crucial aspects such as his age and the length of his driving license, which will determine not only his experience behind the wheel but also his vital one. Obviously, younger people with fewer years of license will have to pay a higher cost for their insurance since their performance on the road carries a higher risk.
Another crucial piece of information is the accident history of the person to be insured, both positive and negative. A person who has never given a report or who at least has not been at fault in accidents in which he has been involved denotes prudence, skill, and reliability at the wheel, which can have the reward of cheap insurance; however, drivers who have been involved in various road accidents in the past will surely have to pay a higher price for their policy… and in some cases, they may even see the insurer choose not to cover them.
Other factors that the insurance company could also consider regarding the driver are the points he has on the license, his place of residence -since there are always areas with a lower or higher accident rate, and the frequency with which he uses his private vehicle. Seniority as an insured can also be an asset in their favor if their track record is positive.
The other key factor is the characteristics of the vehicle to be insured, from its age to its make, model, and version, which will indicate to the company fundamental data regarding the safety it offers – a utility vehicle is not the same as a minivan. Or its displacement -the most powerful and fastest cars, such as sports cars, pose a greater risk of accident than those of mid-range. Aspects such as the possession by the driver/insured of a parking space, as well as whether the vehicle has anti-theft devices or other additional accessories, also come into play.
And yes, also the toppings.
And of course, after everything already mentioned, as we highlighted at the beginning, it is obvious that the type of product chosen and the coverage available will decisively determine the price of the policy. The cheapest is third-party insurance (whose most basic modalities cover civil liability, legal defense, and personal injury), while those with the highest price are all-risk insurance, which can add many more to the guarantees already mentioned. Plus: extension of RC, personal injury and third-party service, travel assistance, broken windows, damage to the car due to collision with animals, theft, fire, or total loss.
Finally, we cannot fail to mention another truism but essential factor: the company we are betting on to insure us. The best bet will always go through a balanced value for money, trying to be well covered by an economical but complete product and trying not to fall into underinsurance or over insurance.
