Understand how your premium is calculated so you can shop around

Sheen Panel Service on 2 August 2019

Car insurance is one of the biggest costs of owning a car, and we all want to get a good deal. So how exactly are car insurance premiums calculated, and how can you get a better deal?

We've put together this guide to help you understand your premium so you can shop around for a better deal. 

If you're ever in a car accident, Sheen has you covered for smash repairs. We can even help you handle your insurance claim. 

How is your car insurance premium calculated?

car insurance premium

Car insurance premiums are calculated based on risk. Insurance companies use a number of different statistics to determine your level of risk as a driver and then use this to calculate your premium. Generally speaking, the riskier you look to insurance companies, the higher your insurance premium will be. 

The factors insurance companies use to calculate your premium include:

  • The details of your policy
  • Your age
  • Your driving history
  • Your car
  • Where you live

Factors which impact your car insurance premium

While each insurance company will have their own algorithm for calculating your insurance premium, they all consider several common factors. Here are the top 5 factors which will impact the cost of your insurance premium and what each one means:

1. Your policy

Some policy features will be more expensive than others. For example, comprehensive car insurance is always going to be more expensive than third party car insurance. You also need to consider your excess (the amount you need to pay if you make a claim), because if you have a lower excess or zero excess, you will likely have a higher premium.

Your policy can also include optional extras which can add to the cost of your premium. Things like roadside assistance, getting a hire car after an accident, and windscreen cover can all add to your premium. Make sure you choose only the options which are important to you, so you get value for money.

2. Your age

Younger drivers are statistically a higher risk of getting into accidents than older drivers, so people under 25 years of age tend to pay a higher insurance premium. You can't change how old you are (except by waiting), so there's not much you can do with this information if you're under 25. If you're a bit older though, read about the best car insurance for over 30s

3. Your driving record

If you've had to make insurance claims in the past for accidents where you were at fault, you're going to have a higher insurance premium, unfortunately. This is one of the biggest factors insurance companies use to estimate your risk as a driver.

If you have a clean driving record, then no worries. But if you've had to make a claim, the good news is that insurance companies can only ask if you've made an at-fault insurance claim in the last 5 years. You might have to do some waiting, but once it's been 5 years since your last claim, you can shop around for a lower premium.

4. Your car

Insurance companies will look at the vehicle you drive when calculating your car insurance premium. This is because some types of vehicles are statistically more likely to be involved in an accident or more expensive to repair or replace if they're damaged. If you're in the market for a new car, it's probably worth considering the cost of insurance when choosing your next vehicle. 

5. Your location

If you live in an area with a higher crime rate, this may have an impact on your car insurance premium. This means insurance companies will also consider where you park your car at night. Your car will be safer if it's parked in a locked garage than if it's parked on the street, after all. 

If you need smash repairs, call Sheen first

At Sheen, we work with all major insurers and we provide the highest quality smash repairs you'll find anywhere. We'll get your vehicle back to its pre-accident condition, and we'll get you back on the road sooner. We can even help you with your insurance claim.

When you're shopping around for your car insurance policy, make sure you have choice of repairer so you can decide who repairs your vehicle. 

For the very best in smash repairs, find your nearest Sheen location.