What Sets The Price Of Insurance?

There are many factors that determine how much your car insurance premium will cost you. Firstly there are your own personal circumstances, ranging from how old you are to where you live and details of your own driving history.

Then there is the type of insurance cover you want and the level of benefits that your policy provides.

Other factors that drive the cost of car insurance are completely out of your hands and are governed by outside circumstances. These include:

Stock Markets

The money that insurers are paid by their customers is not simply kept in the bank until there is a claim to be paid out, but invested so that the insurance company’s funds can be stockpiled.

If the stock market remains stable, premiums tend to do likewise and are kept at reasonable levels, but if the market suffers a downturn it’s a different story.

Soaring Litigation Costs

Drivers these days are more likely to make a claim for personal injury than they used to be and the amounts paid out for cases such as serious whiplash are far higher. In addition, courts finding in favour of claimants tend to pay out very significant awards in cases involving serious injury or fatality.

NHS Costs

The costs for treatment in an accident and emergency department, including charges for the use of ambulances, can now be claimed back by the hospital, with the bill picked up by the insurer of the driver at fault for the accident

Uninsured Drivers

The average car insurance policy costs around £30 more than it should as a direct result of the added risk posed by uninsured drivers. Recent reports show that as many as 1 in 20 drivers has no insurance and research gathered through a Mori poll even suggests that the number could be as high as 1 in 10.

Given all these factors that can affect the price you pay, ensure you get the best deal possible by comparing car insurance quotes with a comparison site like thecomparisons.com.