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Thu, 27/08/2020
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How Is Your Car Insurance Calculated?

Many of us compare insurance premiums annually to try and get the best deal for our money, but is there anything you could be doing to help lower your premium price? What can affect the cost of your insurance? And how do insurers calculate the premium they offer you? In this article, we take a look at the variety of criteria considered by insurers when calculating your premium.

What Factors Are Considered When Calculating Your Insurance Premium?

When calculating your car insurance premium, insurance providers will look at a variety of factors, such as:

  • Make and model of your car
  • Your annual mileage
  • Your age
  • The amount of voluntary excess you are willing to pay
  • Where you park overnight
  • Your occupation
  • Your address
  • Your driving history
  • How long you have driven for

Ultimately, car insurance providers calculate your car insurance premium by assessing how big of a risk you pose to them. We take a look in greater depth at some of these factors below:

Driving History

If you have a track record of safe driving and no prior claims or convictions, you will be seen as less of a risk to insure. As part of this, insurers will also consider any no-claims discount you’ve accrued through years of incident-free motoring. 

Insurers consider driving convictions you may have accrued over the years as these are an indicator of your likelihood of having an accident in the future. This is likely to have an impact on the price you pay for your insurance. Therefore, the best advice we can give here is to always drive safely and within the law.


Your lifestyle often plays a part in calculating your premium. For example, a young motorist without much experience is more likely to make a claim than older drivers of the same car, in the eyes of an insurer.

Additionally, how far you intend to drive may be considered because the more time you spend on the road, the more likely you are to make a claim. Namely, if you commute to work, you are more likely to be driving at busy times which in turn increases your chances of making a claim.

Nationwide Statistics

There are certain factors of car insurance calculations that are beyond your control, such as what is going on in the world and how this can impact a claim you may make.

For example, if the cost of car repairs goes up, the chances are your premium will also rise to compensate.

Talking of factors that are beyond our control, ‘claims culture’ is also considered by insurers when setting prices. An example of this would be that if the overall number of claims made by UK motorists increases, insurers may have to raise prices to cover their costs. Likewise, if the type of claims made by motorists’ changes, this could have an impact.

Your Occupation

What you do for a living tells insurance providers more about you and therefore how likely you are to claim. For example, if your job suggests you drive a lot, this could increase your premium.
Just remember when you are shopping around for insurance quotes that the details you give should be as accurate as possible and not misleading, otherwise you could invalidate your policy.

Your Vehicle

Cars are categorised into insurance groups, and that plays an important role in calculating your premium.
Simply, the more expensive your car is, the more it is likely to cost your insurance provider if you need to make a claim.

Also, non-essential car modifications could increase your insurance, so be mindful of this if you choose to get anything modified.

Your Age

If you are a young driver, it is likely your insurance will be higher. There are ways of softening the blow, though. It might be worth considering a telematics policy and it is a good idea to shop around to find the best policy type suited to you.

Insurance Add-ons

Insurance add-ons are optional and opting for them is completely your choice. But it is worth noting that with some add-ons, removing them from your policy could save you money now, but cost you a lot more in the long run.

The following types of add-ons could impact the cost of your car insurance:

  • Key cover for stolen or lost keys protection
  • Personal possessions cover
  • Windscreen cover
  • Personal accident cover
  • Motor legal protection
  • Driving abroad
  • Breakdown cover
  • Protected no claims discount
  • Courtesy car

Why Choose Be Wiser Insurance?

Some insurers give you these add-ons as part of your policy, which is a benefit worth considering.
Here are three key reasons to choose Be Wiser Insurance:
1.    We offer wiser value

  • FREE legal expenses cover

  • FREE misfuelling cover

  • Multi-vehicle discounts

  • Panel of leading UK insurers

2.    We won’t leave you uncovered

  • FREE breakdown cover

  • FREE claims assistance

  • FREE three months personal accident cover

3.    We are here for you

  • 24/7 freephone claims hotline

  • UK based staff and offices

  • Friendly and experienced staff

How To Reduce Car Insurance Premium

The best way to save money on your car insurance is by comparing quotes from multiple insurance providers. At Be Wiser, you can do just that – get a quote now.