WHY CAR INSURANCE PREMIUMS VARY SO WIDELY
It sounds unfair on the face of it, but it’s true; even if two people drive the same make and model of car and insure with the same company, it’s unlikely they‘ll pay the same premium.
But it’s not as simple as that, explained MiWay’s Rory Judd. People are all different, he said. They work and live in different areas, some are married and some are not. Statistics collected by insurers show that gender, age, where you live and even your financial status will have an effect on the likelihood of your car being stolen or involved in a crash.
It’s also just plain common sense that a more expensive car will cost more to repair after a crash - or replace if it’s been stolen. But it’s also true that some cars are easier to steal than others, while some - notably certain Toyotas - are more popular with car thieves.
Naturally, the risk of your car being stolen depends on where you live, and where the car is parked - particularly overnight.
A car in a locked garage with a burglar alarm in a gated townhouse cluster is less likely to be stolen than one parked in your driveway on a quiet suburban street with poor lighting - which is why even upmarket areas can sometimes have a higher risk profile, and insurers will sometimes refuse to insure a car that’s regularly parked on the street unless it is fitted with an approved alarm system or a tracking device.
Another factor that affects the premium, particularly on a family car, is who drives it most of the time. Mom’s taxis are generally at lower risk (sorry guys, history shows that women have fewer and less serious claims) but a car that is often driven by younger drivers will attract a higher premium.
It sounds unfair, but it is also historical fact that younger drivers - and even older ones who’ve not had their driving licence very long - are at a higher risk of crashing, which is why your insurer will always want to know the age and gender of the ‘regular driver’, and when they got their licence.
And here there’s a bump in the road: while the value of your car depreciates over time, the cost of spare parts goes up. Most insurance claims are for crash damage - and a bumper for an older car can cost as much as one for a new car, certainly more than it did when the car was new!
Which is why insurers are often unwilling to reduce the premium on your car’s insurance even though the car may be worth less - and also why comparatively minor crash damage to an older car may lead to its being written off, simply because the cost of repairs may be more than the car is worth.
Judd also pointed out that motor vehicle insurance doesn’t cover the stuff in your car; you’ll need to take out extra cover (at the same time as you take out the car cover) to cover you against the car being broken into - and even then you’re not covered if somebody uses a garage opener to jam the remote locking mechanism of your car and quietly helps himself to whatever is in the car without having to break in.
The best insurance against theft out of your car, he said, is simply to check that the car is actually locked before you walk away!