• Home
  • Blog
    • Resources
    • Business Partner Magazine Archive
  • About Us
    • Cookie Policy
    • Disclosure Policy
    • Privacy Policy
    • Terms of Website Use
  • Contacts

Business Partner Magazine

Tips and advice for entrepreneurs, start-ups and SMEs

  • Business Success
  • Marketing
  • Finance
  • Employees
  • Technology
  • Start-up
  • Productivity
  • Communication

What factors affect your premiums?

March 23, 2022 by BPM Team

Click here to get this post in PDF

Too long to read? Enter your email to download this post as a PDF. We will also send you our best business tips every 2 weeks in our newsletter. You can unsubscribe anytime.

Enter your NameEnter your Email Address
Insurance agent using tablet and car on background

At mustard.co.uk, cheap car insurance is quick and easy to find. Simply answer a few questions about what you need along with details about you and your car, and you’ll be able to compare dozens of quotes from leading insurers.

But what factors affect the cost of your car insurance, and how do the answers you give affect the premiums you see? Here’s what insurers consider and what you should bear in mind when you look for car cover.

The policy you choose

Third party only might be the minimum level of cover you can have by law, but that doesn’t mean it’s automatically the cheapest option on offer. While that might have been the case in the past, insurers found third party policyholders claimed more than drivers with comprehensive cover. Nowadays, that means comprehensive car insurance is often cheaper than third party policies. 

You could also save by taking out telematics insurance. With these policies, a telematics 

device monitors your acceleration, braking, cornering and speed and uses that information to influence your premium. If you drive consistently well, you could see your premiums fall faster compared to non-telematics policyholders.

Your no claims bonus

You earn a no claims bonus for every year you drive without making a claim, this is converted into a discount on your premium. The more years of no claims you have, the bigger the discount, which could be as much as 75%. 

With that in mind, think carefully before you claim for every minor scratch or bump as it could lower the discount you get. 

Your claims and driving record 

Insurers will ask whether you’ve made a claim in the last five years. If you have, you can expect to pay more for your insurance compared to someone who hasn’t recently claimed. From an insurance point of view, a recent claim puts you at greater risk of claiming again, which is reflected in your premium. Similarly, penalty points can hike up premiums too. 

Your age, experience and job

It’s no secret that inexperienced and young drivers pay some of the highest premiums of all age groups. This is fundamentally down to statistics which show under 25s are more likely to be involved in an accident. 

The job you do can also affect your premium so when you choose a job description, try varying the title to see what happens (for example, headteacher versus teacher). Needless to say, whatever you choose still has to accurately describe what you do, otherwise, you risk invalidating your policy. 

Where you live and how secure your car is

You’re likely to pay a higher premium if you live in an area with a higher than average crime rate. Realistically, there isn’t a lot you can do to change this but enhancing your car’s security can help, for instance, investing in a Thatcham approved car alarm or immobiliser.

If you have a garage, keeping your car locked in there overnight can also help cut insurance costs.  

The make and model of your car

Large and powerful cars generally cost more to insure as they’re more likely to be involved in collisions, be stolen or vandalised. If you’re currently in the market for a new car, take a look at the insurance group it’s in — the lower the group number, the cheaper it will be to insure. 

It’s also a good idea to think twice before modifying your car in any way (unless it’s to upgrade security). Variations in factory settings can also increase premiums, making your car more expensive to repair or replace. 

How you use your car and the miles you cover

Insurers will ask you to choose a class of use, this is simply another way of asking you what you use your car for. There are three classes of use:

  • Social, domestic, pleasure (SDP)
  • Social, domestic, pleasure and commuting (SDP+C)
  • Business use

SDP is considered the least risky in the eyes of insurers because you’re less likely to be involved in an accident. Mainly because the assumption is that you’ll cover fewer miles and won’t be driving in rush hour. In contrast, you can expect to pay a little more if you commute and if you use your car for work and drive to multiple work locations. 

How you pay for your policy 

If you can, try to pay for your policy in one go. Splitting the cost into monthly instalments may be more convenient, but it means you’ll pay interest and more overall.  

If you want to try and keep the cost of your policy down, you can increase your excess but remember that it still needs to be affordable. If you make a claim, your insurer won’t be able to proceed until you pay your excess. 

To compare great deals on your car insurance, head over to mustard.co.uk. 

You may also like: 5 Auto Insurance Facts That Every Car Owner Should Know

Image source: Shutterstock.com

Filed Under: Automotive, Featured Posts, Insurance Tagged With: cars, Featured Article, insurance, Vehicles

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Disclosure

We earn commissions if you shop through the links on this page.

Recent Posts

  • 6 Top Tips About Business Disputes
  • How to Protect Your Business Against Cybercrime in 2023
  • Benefits and Risks of Using a Real People Finder
  • Interview With Asif Ali Gohar on the Hurdles of Starting a Business So Young
  • Navigating the Complexities of 18-Wheeler Settlements: A Lawyer’s Perspective

Categories

Archives

Digital Marketing Agency

ReachMore Banner

Tags

Accounting apps bitcoin brand business growth business skills business success communication cryptocurrency Customer Service Data design ecommerce Efficiency employees Featured Article finance finances Health and Safety infographic insurance Investing investment legal legal services legal tips Management Marketing marketing strategy Outsourcing productivity property Real estate sales security SEO Social Media software starting a business startup Technology Trading Training website workplace

Disclosure

We earn commissions if you shop through the links on this page.

Digital Marketing Agency

ReachMore Banner

Business Partner Magazine

Business Partner Magazine provides business tips for small business owners (SME). We are your business partner helping you on your road to business success.

Have a look around the site to discover a wealth of business-focused content.

Here’s to your business success!

Copyright © 2023 - Business Partner Magazine·