Car insurance: this is how the price is calculated

Perhaps on occasion you have wondered why there is so much difference in the price of car insurance . From one vehicle model to another, the difference can be huge. Also for the same vehicle, the price is different depending on who is the insured. Why does this happen?

Insurance companies take into account different factors when setting their prices, but the main ones are two: the range of the vehicle and the driver’s profile .

Expensive car, expensive insurance

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The characteristics of the car to be insured is the most important factor in determining the price of insurance. Logically, the price of a powerful Audi Q7 will be higher than that of a 75 hp utility . In general, the characteristics of the car that most condition the price of insurance are three:

  • The model Companies study the cost of vehicle repairs, as well as the cost of the total loss or theft, so that brand and model constitute a decisive factor in the pricing.
  • Power The more powerful the vehicle, the greater the likelihood of being involved in an accident and, therefore, the higher the price of insurance.
  • Antiquity Although many people think that the newer the car, the greater the price of insurance, the truth is that it is the other way around. The greater the age, the greater the possibility of an accident and, therefore, the higher the price of insurance.

Rookie driver, very expensive insurance

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The profile of the person who will drive the vehicle is the other crucial factor in determining the price of car insurance. This is the reason why price comparators ask us so many personal questions on their forms when making a comparison (age, date of license, sex …).

The age and years of the card are the two most relevant variables. In general, the older and more experienced behind the wheel, the lower the likelihood of an accident and, therefore, the lower price of insurance. As a consequence of this, car insurance for young people who have just taken out their card are very expensive. The insurance of older people is also more expensive.

In addition, insurance companies take into account the sex of the driver (men pay more for car insurance than women because they have more accidents) and the history of accidents (someone who has never given a part of the accident can enjoy a lower renewal price).

Other factors to consider in car insurance

Other factors to consider in car insurance

There are other factors that influence the insurance price to be higher or lower. For example, the location of the insured’s home (companies take into account the accident rate of the area), the type of location (in large cities the price is higher than in rural areas), if there is a parking space (the individual garages are safer than the collective ones) and the use that will be given to the vehicle (the more kilometers of use, the greater the price).



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