When it comes to calculating your premium the huge car insurance companies such as Tesco, Esure, Churchill will take a lot of factors into account when calculating how much you should pay. So being aware of these factors and understanding them will help you a lot in cutting the cost of your car insurance.

Registration Documents

A well loved query is whether or not the registration document should be registered in one person’s name and the insurance papers in someone else’s name? The solution is this, the policy holder’s address is the risk address. But the registered owner of the motorcar could live at a different address. This means if you have a car, you can arrange its insurance policy to be in a different person’s name that may be living at a different address than yours.

For example, Mr Smith wants to buy a car for his sister’s birthday and she lives in another city and he want to keep the present a surprise. He goes to Yes Car Credit, buys a groundbreaking new Ford Focus and sends off the documents to the DVLA to be in his name, gets it insured in his sister’s name and drives to her home under his own insurance policy to surprise his sister on her birthday.

The Car

The car of course makes a huge difference to the cost of the car insurance.  The larger the engine size of the car, the higher its insurance premium is going to be, bearing in mind that other factors are also taken into account. For instance a very experienced driver with maximum No Claim Discounts, clean licence and clean driving history

(i.e. no claims, no convictions) on a new, huge engine car (2.0i or 3.0i) will be paying far less than someone whose driving history is not as clean. Therefore don’t be surprised if you are quoted an extortionate amount for your policy whereas your dad is only paying half of that.

The Car Insurance Groups

Cars are classified into different insurance groups. The following are the factors used to calculate group ratings:

New Car Values.

The prices of new cars are taken into account as they are often a excellent guide to the cost of replacement and repair.

Cost of Parts and Hurt recovery.

This relates to the susceptibility to hurt of various types of cars when they are involved in accidents and the cost of parts involved in their repair. The lower these costs  the more likelihood there is of a lower group rating.

Repair Times.

Longer repair times mean higher costs and the greater likelihood of a higher group rating. Different paint finishes on modern cars are an vital factor, so these too are taken into account.

Body Shells

The availability of body shells (the basic frame of the car) is taken into account in group ratings because they are essential for certain accidental hurt repairs.

Performance

Acceleration and top speed are vital factors. Insurers know very well, from their claims statistics, that high performance cars often result in more frequent (and more expensive) insurance claims.

Car Security

Security features fitted as standard equipment by motor manufacturers can help to reduce insurance claims costs. Such features include high security door locks,  

Alarm /Immobilisation Systems.

Glass etching, coded audio equipment and locking devices for alloy wheels.

So a high performance car, such as a Ferrari or Aston Martin, could be classified as group 20, whereas a smaller car such as a Corsa, could be a group 4 or 5 car. You can check with a garage or an insurance company about the car you have (or if you are about to buy one, check out which insurance group this car would fall into to get a better estimate of the total cost of the ownership of the car).

For more information visit: Tesco Car Insurance