When it comes to car insurance, competing with other insurance companies often results in lower rates. Every year, when renewing their car insurance contract and paying their premium, policyholders should make a comparative study. Moving, adding a driver, making a claim: any change that affects their car insurance is also an opportunity to take a look at the rates charged by the competition.
Taking advantage of the annual deadline: focus on how the car insurance premium is calculated
To avoid being exposed to a lack of insurance, an offence severely punished by the law, every driver is required to take out car insurance to get on the road. To be covered by the guarantees of his car insurance, whether it is third party or comprehensive, the insured pays a premium to his insurer.
The amount of the premium is calculated according to the coverage chosen and the guarantees it covers, and is also determined by the profile of the driver and the vehicle used. To be sure you are paying the right price for your car insurance, it is advisable to compare its rate at the time of the renewal, usually annual, of your contribution. Most car insurance companies offer free online quotes: it’s a good opportunity to compare prices! For similar or even identical coverage, the price difference can be significant.
Review your car insurance rate each time your situation changes
To calculate the insurance premium applied to each client, insurance companies take into consideration different elements that allow them to evaluate the risk and determine the amount of the annual insurance rate for each driver. They look at
- the place of residence, place of work: these elements have an impact on your movements and thus, an incidence on the calculation of your premium;
- the type of parking: the use of a closed and secured garage will be valued, contrary to a parking in the street;
- the driver(s): the age and the profile of the driver(s) influence the premium;
- the type of vehicle: the value, age and power of the car will also affect the premium.
Adding a driver, moving house, acquiring a new vehicle are all opportunities to review the amount of the premium offered by your insurer.
Take into account the impact of the bonus-malus coefficient on the premium
To calculate the risk, the insurer relies on the driving history of the insured, which is available to him thanks to the transmission of a statement of information, which is mandatory when applying for a contract with a new insurance company. Points, offences, medical visits, this document contains all the information related to your driving license which allows the insurer to evaluate your risk profile.
To establish their rates, insurers rely on the bonus-malus system or coefficient of reduction-majoration of the premium:
- drivers without claims are encouraged by a bonus: a 5% reduction in the amount of their premium at the end of the year,
- On the other hand, if a claim is reported, the driver’s premium is increased by 25%.
It is therefore in every driver’s interest to shop around when renewing his or her premium, for policyholders with a bonus, or when his or her malus increases, in the event of a claim.