For many of us, motor insurance is a significant financial burden. No one enjoys paying for car insurance, but just as few people have bothered to research ways that they might try to reduce the cost.
Understanding the factors that your insurer take into account when deciding upon your insurance premium will go a long way in helping to reduce its price. By doing this you can tailor your insurance policy to the coverage you actually need and omit unnecessary expenses.
So, without further ado, what questions should you ask yourself when evaluating the cost of your insurance?
- How much does your car cost? The maximum value that an insurer will pay out in the event of an accident is the total cost of your car. Thus, it stands to reason that the cheaper your car is, the cheaper your insurance payments will be.
- Does your car have modifications? If you’ve added accessories to your car to improve its performance or handling, these can increase the risk of your vehicle being in an accident or stolen. Any additions you make to your car may be considered a risk factor by your insurer and hence, will increase the cost of your insurance.
The exception to this rule is if you have an alarm or immobiliser installed by a professional. This will improve your car’s security and decrease your premium.
- Where is your car kept when you’re not using it? If your car is safely stored in a garage, this will cost you less than if you keep your car on the street curb.
- How old are all the drivers on your policy? If you have drivers under 30 driving your vehicle, this is a greater risk and will lead to higher insurance premiums. If you don’t have any younger drivers, you should look into a restricted driver option so you aren’t paying for unnecessary coverage.
- Is your car imported or a rare variety? If so, it will be more costly and difficult to repair in the event of an accident, so will cost more to insure.
- What is the mileage on your car? Cars that have been driven less often are out on the roads less and so have less chance of being involved in a collision. If you don’t drive your car very often, you shouldn’t be paying high premiums.
- How powerful is your car? If you are driving an eight cylinder instead of a six cylinder, that small boost in power might be costing you a lot more to insure. Consider sacrificing a little bit of power for some savings in the bank.
- Do you use your car for work? Business car insurance is more expensive than personal car insurance.
- What is your driving history? Drivers who have more recently made claims, had a license suspension or committed a driving offense will have to pay a higher premium.
- How large is the excess specified in your policy? Greater excesses will provide you with a greater sense of security but also a larger premium.
- Finally, do you live in the country? Whilst this probably isn’t a feasible factor to change in order to reduce your insurance premium, it is worthwhile to know that regional drivers pay cheaper car insurance premiums. They encounter less traffic, so have less risk of collisions.
IC Frith & Associates (WA) offer a range of customised insurance options, so you can save your hard earned cash whilst still receiving the coverage and security you need.
In the wake of the new financial year, why not reconsider your motor insurance policy. This time next year, you could be buying a new car with the money you’ve saved!
Contact us at IC Frith & Associates (WA) to discuss a personal car insurance policy that is great value and tailored to your needs. We are committed to offering you security without the hefty price tag.