Automotive insurance costs are based on a factor of risk and every major insurance company looks at a series of these different factors before deciding on the price of a policy and the type of coverage it can provide. The car insurance rating system takes an individual vehicle type and looks at the type of performance it possesses as well as the accident history of the model.
Initially, the car insurance rating system doesn’t take extra security features into consideration such as airbags, immobilizers or other anti-theft devices. Insurance companies begin assessing risk by considering the standard model of the vehicle involved and this risk is further evaluated by taking extra features into account when dealing with the customer.
The car insurance rating system will look at all of the following factors before presenting an initial premium to the consumer:
- Is the vehicle more likely to be used for business or domestic purposes? If the vehicle is likely to be on the road on a regular basis, the car insurance rating system will recognize an increase in risk.
- Three of the most major considerations are the selling price of the vehicle, the potential costs of replacement components and repairs if it becomes involved in an accident and the level of performance the vehicle is capable of.
- The car insurance rating system will consider a car that is kept in a garage overnight to be less of risk than a vehicle that is parked in the street.
- The age of the driver will also be considered. This is likely to escalate if the driver is under 25 or over 60 years of age.
- A car insurance rating is likely to differ depending on whether the policyholder is purchasing a comprehensive or third party policy.