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10 things that affect car insurance premiums

Motorists have been warned to be aware of 10 factors, some surprising, that could be increasing their car insurance premiums without them realising.

25 per cent don’t update their policies
Price comparison experts from believe thousands of UK drivers could be paying more than they need to for their car insurance. A recent survey showed that 26.4 per cent don’t update their policies throughout the year with changes to circumstance and 15 per cent don’t know inaccurate details could void their insurance.

I would say those figures are even higher here in Ireland, and that’s aside from the tens of thousands that don’t shop around for car insurance.

All drivers are urged to check their policies and make sure all the information they have told their insurer is fully accurate and up to date.

Factors such as driver age, mileage and where the vehicle is kept overnight can all affect the premium cost. Modifications such as vehicle branding, spoilers or alloy wheels need to be declared or could run the risk of invalidating the insurance policy. It’s vital all drivers check the full modifications list and update where appropriate when finalising their details.

Group Rating system
In the UK, there is what is called an Insurance Group Rating system. A Group Rating Panel, administered by Thatcham Research, assigns new car models to an insurance group from 1 (cheapest to insure) to 50 (the most expensive).

Cars in the highest groups, typically high performance models, are likely to cost insurers the most in insurance claims.

It is important to note that insurers in the UK may use the panel’s recommendations in their calculation of car insurance premiums, or they may choose to use their own groupings, as is probably what each insurer in the Irish market does.

According to the Association of British Insurers, the cost of motor vehicle repairs accounts for over half of all the money paid out in motor insurance claims, so repair costs feature strongly in how the insurance groups are defined. It is likely to be similar here in Ireland.

Ten factors that could affect car insurance premiums:

Your age
Many car insurance providers consider those over 75 as being high-risk drivers, meaning many older drivers may see their premiums increase at this age. Motorists who are still learning, are young or new drivers can also experience increased premiums due to their relative inexperience and heightened risk of accidents – so it’s important to look for these bespoke products on comparison sites such as young driver insurance, and get the most competitive policy and price possible.

Where you live
Living in a perceived safer area can positively influence your premiums, whereas living in a built-up area or a place with a high crime rate can cause insurance providers to charge more – as they are viewed as areas with a high risk for accidents.

Where you park
Where you park your car is an important factor for many insurance providers. A private driveway is seen as far less of a risk than parking out on the street and can make a big difference to your premium cost. Parking your car on the roadside leaves it vulnerable to scrapes and accidents and can increase the insurance premium.

Penalty points
It is important for motorists to drive carefully and be aware of the knock-on effect of penalty points. In the UK, three points on a licence can mean 5 per cent more on a premium every year for the four years an infringement stays on the licence. Six points can push up fees by about 25 per cent. You can be sure here in Ireland, there are also costs for penalty points.

Age and value of your car
The insurance group your car model is in will affect the premium cost. Car models are grouped based on the price, model, repair costs, performance, price of replacement parts and body shell. A less expensive car can lead to a lower premium cost, as the parts are cheaper to buy which makes the car easier to fix.

Your job
Those with jobs which require a high amount of time behind the wheel can experience higher premiums. Jobs associated with high levels of stress can also hike up prices, due to an increased chance of being involved in an accident. Also, if you use your car to get to work, even if it’s just to get you to the train station, it’s classed as commuting and needs to be declared as such.

The process for many insurers is the more you drive, the more likely you are to end up in an accident and affect your claims bonus. But, there are some insurers who will charge more to those who aren’t driving very often, as they are perceived as lacking in confidence. In the UK, low-mileage insurance is an option to those who drive less than the average motorist.

Modifications, to either appearance or performance, can negatively impact your premium cost. Expensive modifications can make your vehicle more attractive to thieves which in turn can increase the premium. It is important to declare all modifications to your provider and be aware that failure to update your policy with new additions can render the insurance invalid.

If you share a car with your partner or you want to insure a young driver, they can be added onto your policy as a named driver. Adding a partner with no claims could actually benefit the cost of your premium. However, you need to ensure the main driver of the car is accurate and spends the most time behind the wheel – failure to do so is illegal and could not only invalidate your insurance but leave you with a criminal record.

Added extras
It could be worth adding a dash cam or a tracker to your vehicle – these are price sensitive questions and could help reduce your premiums. Also, telematics products could be worth installing if you find yourself in a high-risk driver category, such as young drivers.