What Factors Affect Car Insurance Premium?

What Factors Affect Car Insurance Premium?
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There are wide-ranging factors that influence car insurance premium. If you are one of those people who search for online car insurance in Dubai, you should know about the way car insurance premium is calculated by the companies. When it comes to asking for insurance quotes, there is no one size fits all policy for it. Insurers consider an array of factors before quoting premiums, which not only helps them attain their business objectives but also allows them to cater to the distinct needs of every customer. The successive proliferation of insurance providers in the market is leading customers to take the bait as some insurers provide misleading information that can hamper their overall user experience.

Whenever you come across an insurer that claims to offer the lowest premium for your vehicle, there is a lot more to it than it seems. It might appear as if you are saving a few dirhams, but there is definitely something that you fail to take into account- such as a lower premium does not usually mean that you are entitled to the same benefits that an insurer with high premium provides. Having that said, a higher premium doesn’t necessarily mean you will get absolute coverage. This is where your driving history and plenty of other factors come into play. However, it is imperative that an insurer should ask you important questions that can help them determine the reasonable premium amount, which will help you get covered in the best way possible.

Recently, the UAE insurance Authority introduced some revisions, which as a result has increased the cost of car insurance for vehicle owners. It goes without saying that customers compare car insurance in Dubai before settling for the right one still they are not aware of the fact that determine the rate of insurance. Here, we have tried covering some points that contribute to the cost of the premium.

Age and Driving Experience

It may sound unreal, but one of the contributing factors of varying insurance premiums is your age. For someone who is aged below 25 years with a freshly minted driving license, the chances are high that a comparatively high amount of premium will be charged in this case. This computation is based on a statistical finding that states that people who fall under this age category have a proclivity to have accidents owing to careless driving. Before you buy online car insurance in Dubai, please take notice of this point if somehow it relates to you.

Driving Accidents and Fines

It comes as no surprise that drivers who have received fines in violation of Dubai Traffic rules or have been involved in an accident in the past will be asked to pay a higher premium than usual. Insurers will charge a high price premium if the insured has made claims in the past. On the contrary, if a person hasn’t made any claim in the past, he/she can ask for a no-claim discount that gets deducted off the premium amount. For the first-timers, who compare car insurance in Dubai and find the best policy without leaving any stone unturned can certainly take note of this point.

Car’s Age and Coverage

If you have just brought a new car and been searching online car insurance in Dubai, bear in mind that you would require a comprehensive coverage to ensure its safety and protection against unforeseen events. Considering the fact that an expensive car is a costlier affair when it comes to repair or replace it, you need to shell out more towards the premium payment. However, cars that are a tad older can be secured using a cost-effective third-party cover.

Type and Features of Your Car

A high-end car owner should shell out more on expenses pertaining to repair or replacement because luxury cars come with pretty expensive spare parts. Interestingly, insurers can give leeway on the premium if the car is laced with sophisticated safety features which mean that a lower premium will be charged in the final quote. In the same way, a vehicle with quite sizeable engines can be charged with the higher-than-usual premium payment.

Agency or Non-Agency Repairs

Insurance seems incomplete without mentioning repairs.  Vehicle owners can either choose agency repair service, offered by the official dealer or opt for non-agency repair service that is approved by the insurer. Customers can pay a certain sum to include agency repairs in their car insurance. Noteworthy here is that before customers take online car insurance in Dubai, they should check whether or not it is already included in the policy.

The Area in Which A Car Will Be Driven

The car insurance companies in the UAE also take into consideration the place and timing as to where and when the car will be driven to understand the needs of the customer who not only wants to compare car insurance in Dubai but also buy it. This way, the insurer can better help customers find those areas they might not have been covered for on their default schemes. Also, the traffic laws in each of the emirates may vary. For example, if you have purchased a car in Dubai but wanted it to use in  Oman and return back on a daily basis, you will need to get add-on cover for Oman, as it is an entirely different area. Ideally, your car insurance company should get as much information about your needs as possible to serve you in the best way possible.

Excess or Deductibles

An excess insurance policy comes with additional coverage in addition to the standard primary policy. The higher your excess amount, the lower is your premium and vice versa. A deductible is referred to as the amount an insured pays before an insurer will issue the remaining claim payment.

Bulk Purchase

By purchasing insurance policies in bulk, customers can avail attractive discounts with the utmost ease. If you have more than one car or a fleet in general, it is advised to purchase insurance policies in bulk without a second thought.

The Number of Covered Kilometers

It comes as no surprise that car insurance companies will charge more if they find your car a bit high on the riskier side.  Supposedly, a car that has been exploited to the hilt in terms of mileage and the number of kilometres covered is at higher risk of getting withered due to over usage. So, it is worth noting that overall kilometres of your car should be kept as low as possible. You can take alternatives like limiting the excessive use of your vehicle at times when it’s not much necessary. You can choose alternative means of transport such as carpooling or whatever suits you the best.

Over to You

In the UAE, the coverage period of a one-year car insurance policy would last for thirteen months. Customers will get one month extra as a grace period without penalty as offered by the RTA to register your car again. By following these points, you will be able to understand the factors that affect car insurance premium in the UAE.

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