How to Calculate Car Insurance: The car insurance play a vital role in the lives of drivers. Having a vehicle entails the obligation to hire a Civil Liability insurance, but also opens a wide range of coverage to the user that will cover the possible damages that may be suffered, both material and personal.
The prices of contracting an Auto policy vary depending on the insurer because with the same car you will get different prices in different companies. And it also changes according to the person who is going to drive it and the type of car it is.
Do you want to know how the Car insurance price is calculated? With this guide that has prepared you will not know the exact amount of the premium that you will have to pay to insure your vehicle, but when you look for insurance you will know what factors your insurer has used to calculate the Car insurance price.
Factors to take into account when calculating car insurance
As we say, the factors from which the insurance company will calculate the premium that you will have to pay if you contract with them are several, but they can be easily divided into 3 categories:
- The insurance itself
- The history
The type of car insurance influences the price
It seems obvious to say that the type of car insurance that you want to hire influences the calculation, but it deserves an explanation. Insurers calculate the premium based on the risk they assume since the insurance function is that they are the ones that assume part of the risk and not you.
As is logical, it is different than you risk the risk of having to compensate the third party in the event of a loss (your Civil Liability), to give them all the risks, from the break of a rear-view mirror until the vehicle is stolen.
It is not necessary to know exact figures, but if you add risks the price rises, so if you add some coverage to others to get a more complete insurance the premium will be higher than if you keep the basic coverage of Civil Liability. The equation is simple in terms of the choice between types of insurance, the most common is that a Third Party policy is the cheapest option, followed by Third Party and Full Risk, which is usually placed at a higher price.
However, this rule of “higher or lower level of guarantee higher or lower premium” may not be reflected in the price of the premium thanks to offers or promotions that insurers do to attract customers.
Addition or subtraction according to the car
Another factor that determines the price is the car itself. The type of car you drive and its characteristics can make you add or subtract euros to your insurance quote. In this sense, insurers take into account several factors, among which are:
- The brand
- The model of the vehicle to know its value
- The power
- The type of fuel
- The years of antiquity
- The kilometers traveled
The more value the vehicle has, the more you have to pay , therefore the more kilometers traveled it would be logical to think that the value decreases, but the premium does not have to, if it has many kilometers it means that you use it a lot, and then the probability that you have a loss is greater. Other addends enter the calculation.
The driver, calculator and calculated in the car insurance
Equally important, the car is the driver who uses it. That’s why, in the same way, that you calculate insurance, your insurer does it with your driver profile. The components of the operation are, among others:
- Years of experience
- Years of card
- Geographical scope
- Civil status
The more years you have experience and the older you indicate your identity card, the lower the price, and that is that insurers offer young people and new car insurance novices more expensive because their probability of suffering an accident, according to statistics, is older. For this group, the results, in terms of price, are much better if you opt for a ” pay as I drive “insurance.
If, on the other hand, you are a person over 26, married, with children, and with a serious profession, you can opt for a common car insurance because the calculation will work in your favor because they consider you to be a serious driver and responsible.
Your history varies the Car insurance calculation
Insurers’ calculations do not seem to be done with abacuses, because the previous steps can be reviewed. While the fact that a doctor has our history benefits us because it makes it possible for us to go to him calmly so that the insurer will have it so that you may wish to find a “reset” button. Insurers can check the history of each driver and take it into account when setting the premium that you will have to pay.
Yes, for example, you have been with them for 5 years and you have had 19 accidents, for sure the price you pay for the premium is considerably higher than what you paid in the beginning due to the penalties that your insurer applies for your high accident rate.
But the order of the factors, in this case, alters the product because if in 19 years you have had 5 sinister insurance you pay much less than the first year thanks to the bonuses granted by a good driver. Each company has its own loss history and pricing policy, which is why there are important differences between insurers.
How to Calculate Car Insurance
Doing a recount of all the above you can get an idea of whether contracting insurance for your vehicle will be expensive or economic. If you want to know exact figures do not take a pencil, paper or calculator, enter the insurance search engine and in just a few minutes you can get a calculation of the price of your car insurance.
You only have to take account of what coverages you want for your vehicle and decide between the prices that we show you, if it convinces you, you contract directly with the insurer that you have chosen.