Car insurance (like any other form of insurance) is used to protect the individual or cover any financial losses which may occur from operating a motor vehicle. Insurance premiums can be expensive depending on the coverage one subscribes to. However, understanding how car insurance works could save you plenty of money in the long run. The following are some key factors that insurers use to determine the price or premium on your car insurance and what you can do to keep it as low as possible:
- Age: If you’re very young or quite elderly, your risk of being in a car accident is statistically higher than for middle-aged individuals. You can’t do anything about your age. However, some insurers may penalize you less than others with regard to your cost of insurance.
- Commuting distance to work: The further you drive, the higher your risk of being in an accident.
- Driving history: If you have been arrested or fined for speeding or any another form of reckless driving, you’ll pay for the carelessness with higher insurance premiums.
- Car insurance claims history: Safe drivers are rewarded with lower car insurance premiums. Your history of making claims against your car policy will directly affect the cost of your insurance. The more you use your cover, the more your insurance will cost.
- Marital status: Married people historically are more stable drivers.
- Place of residence: Your residential area can have a drastic effect on your cost of insurance. Insurance companies may penalize you for living in a county, estate or residential area with a history of car theft, vandalism, and so on.
- Type of car you drive: Higher insurance premiums are paid for rare cars. This is because such cars cost more to repair or replace compared to more popular ones.
- Safety and security: Passive restraint systems, front and side-curtain airbags, and other safety features make it less likely that you’ll be seriously injured in an accident, avoiding medical bills that the insurance company would otherwise be obliged to pay. Alarm systems make it less likely that your car will be stolen and need to be replaced. Most insurance companies in Kenya insist that one must install approved anti-thief devices before procuring a comprehensive car insurance cover.
So what should I do to save money on my car insurance? Just follow these steps:
- Don’t file small claims. The more you use your car insurance, the higher your premium rates will be. Paying for smaller losses yourself can save you money over the long term. You also benefit from the non-claims bonuses on premium payments.
- Don’t let other people drive your car. Multiple drivers create multiple risks. More risk, more cost of insurance.
- Wear your seatbelt. Studies prove more people survive accidents and receive less severe injuries when they wear their seatbelts. Less injury, less insurance claim, less cost of insurance.
- Drive at the set speed limits. Speeding cause accidents. Accidents result in claims. Claims jack up your cost of insurance.
- Take a defensive driving course. Some insurance companies provide a discount to drivers who have taken a defensive driving course, especially if the course is from an approved driving school.
- Pay your car insurance premium annually. Most companies charge a service fee if you pay your premiums monthly, quarterly, or semi-annually. It is prudent to pay all at once at the commencement of insurance.