What is car insurance?
Car insurance should be seen as a financial safety net. You pay a premium to ensure that you have financial coverage for your car in case it’s damaged or stolen. Comprehensive coverage ensures that your car is protected regardless of whether it was damaged in a collision or not (i.e. weather damage, damage done by falling objects, damage done on or off road, smashed windows etc.).
What is the difference between a premium and a deductible?
A premium is a monthly or yearly payment that you pay to your insurance provider for your chosen insurance plan. If your insurance pays out to cover theft or damage, it might not cover the entire cost. A deductible is the money you pay to cover the residual costs that weren’t covered by your insurance.
Which factors influence my insurance premium?
Insurance premiums differ based on some important factors. Some of these factors are:
The age of your car
Older cars tend to have lower insurance premiums than new(er) cars. This is because older cars (not including vintage or classic cars) are usually less valuable than brand new cars. It is important to keep in mind that this is a fairly small factor and that your car’s make and model have a bigger impact.
The make and model of your car
Regardless of your car’s age, your premiums will be higher if your car is a popular target for thieves or if it requires expensive, rare parts.
Your background and personal details
When comparing insurance premiums, keep your driving history and personal details in mind. Younger drivers tend to have higher insurance premiums because they’re fairly new to driving. As you get older and more experienced, your premiums tend to drop. If you’ve been in an accident, you could be labelled as an unsafe driver and you will pay higher premiums. Several personal factors (like your age, sex, marital status and whether or not you’re a homeowner) also influence your insurance premiums. Make sure to do your research when deciding on an insurance plan.