Have you ever wondered how insurance companies determine the premiums for customers seeking to insure their cars? Well, as a car owner, you will be required to pay premiums based on the provisions of the insurance company.
In an interview with Kenyans.co.ke, Anne Kimani, a car insurance broker, explained that while premiums vary from one service provider to another, they are also influenced by the customer.
From the model of your car to gender, here are some of the factors insurance companies use to determine your premiums.
Your Age
Unknown to many, your age could play a role in determining the cost of your car cover. Young customers who are below 24 years are likely to get higher premiums. This is because of the high risk as they are likely to cause accidents. The rates will slightly go down with more mature clients, who are seen to be more responsible on the road.
Gender
When it comes to gender, women are likely to pay less for insurance than men since it is statistically proven that they are least likely to be involved in driver under influence(DUI) accidents.
"Women are known to be safe drivers and are less likely to cause accidents in comparison to their male counterparts. They are more likely to get discounts on their premiums based on this," Kimani explained.
Marital Status
Are you married or planning to? Well, married couples are more likely to get discounts when buying car insurance. This because some insurers see argue that married customers have low risk since they are safe drivers compare to single men and women.
Type of car
The premiums will vary based on the model and type of car that you own. The value of your car will affect the premium calculations. If the car is pricey, they will pay higher premiums.
"Your car will be valuated annually to determine the cost of your premiums. I wouldn't recommend some modifications to your car since it will either raise your premiums or discourage the insurer from covering cars with extreme modifications, " she stated.
Driving and claims history
Driving and claims history will be considered in evaluating the premiums paid by the insured. The number of claims and the negative points on your license will guarantee higher premiums. This is based on risk level evaluation.
"If you have a history of having multiple claims, the insurer will definitely raise your premiums," she insisted.
Type of cover
The rate of premiums will vary based on the type of cover you buy. There is the comprehensive cover and third party only cover. The third party offers basic insurance for your car and the insurer will cover expenses by the third party involved in an accident. The comprehensive cover has higher premiums since it is an enhanced package of protection.
"There are different covers that attract different costs. It is important for the insured to understand that the lesser the premiums on the cover, the lesser protection the insurer can offer," she added.
Car Use
The premium you get will definitely depend on how you plan to use the vehicle. You are likely to pay less if your car is most of the time parked at home and driven less. In contrast, if your car is ever busy on the road, then you are likely to dig deeper into your pocket when getting an insurance package.
"The premiums will likely increase for customers if they frequently use their cars for various purposes like in their day to day business activities," the expert concluded.
