How insurers calculate the risk of your policy

What data do insurance companies look for when they calculate the risks from a vehicle or its owner?

Insurance is often a purchase we don't look forward to making, with many people wishing they could spend their money on something else instead. We all know insurance is a requirement on the road, and not having it could get you into serious trouble - but do you know how the price of your insurance premium is worked out? Insurance policies often rely on risk to work out how you much should pay - so we're here to explain just what means.

Your insurance premium will be based on several factors relating to yourself, and the car that you drive. The risk of level of your policy to your insurance company is calculated by factors which would affect the price of any pay out in event of a claim. For example, an expensive car may increase the risk level of your policy as this could mean that it will be more expensive to repair in the event of an accident. Where you live is another factor, if you are deemed to live in a high risk area (somewhere where there tend to be more claims for example), your premium could be more expensive. Other factors that are taken into consideration are: your age, how long you have held your licence, how many years no claims discount you have, what you use your car for, and your occupation. Insurers also look at your past claims history, and whether or not you have any driving convictions, to determine how high your risk is as a driver. The higher risk ranking as an individual – or indeed vehicle – the more expensive the insurance premium will be. When buying a used car always ensure that if the car has been in an accident that it hasn’t been written off as this will make the car a higher risk vehicle which can be difficult to insure.

However, for young drivers who finds themselves in the high risk category of insurance due to claims history or another factors, telematics insurance maybe able to help. Telematics, or black box insurance, gives you a chance to show us how safely you can drive! We use GPS technology which records certain aspects of your driving such as: how quickly you accelerate, the sharpness of your braking, your speed and the time of day (or night) that you are driving. These are then calculated to provide us with your Driving Behaviour Score, which helps us to determine how high risk you are, based on how you drive – as an individual. Find out if you could save money by getting a quote with us today.
 


Posted on March 6, 2019

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