What Impacts Insurance Premiums?

When it comes to car insurance, understanding what impacts insurance premium rates can be a bit of a mystery for many drivers. Several factors can affect how much you’ll pay for your car insurance in Ireland. Knowing what they are can help you make smarter choices to keep your premiums as low as possible. Whether you’re a young driver or a seasoned pro, understanding what impacts insurance premiums is essential to ensure you get the best deal.

  

1. Age and Experience

 

One of the most significant factors influencing your premiumis your age and driving experience. Young drivers, especially those under 25, are seen as higher risk by insurers. This is why their premiums tend to be higher. According to the RSA’s 2023 Summary of Fatalities, one in four people who have died on Irish roads between 16 and 25. This shows how much more likely younger drivers are to be involved in serious accidents. 

What affects insurance rates on a car is also heavily dependent on your driving history. If you have a clean record with no accidents or claims, insurers will see you as less risky, which can significantly reduce your premium. Conversely, a history of accidents or speeding tickets can cause your rate to go up. 

  

2. Vehicle Type and Model

  

The type of car you drive plays a major role in determining what impacts car insurance rates. Sports cars, for example, are often more expensive to insure because they are associated with higher risks of accidents and theft. Additionally, luxury cars or vehicles with high repair costs can lead to higher premiums. 

On the other hand, if you drive a safe, reliable, and low-cost-to-repair car, you could see your premium reduced. Insurers consider the likelihood of a car being in an accident, its safety features, and the cost of repair when calculating rates. 

  

3. Mileage and Usage

  

The more you drive, the higher the chance of being involved in an accident. For this reason, what affects your car insurance premium rates often includes how much you drive in a year. If you’re someone who uses their car daily for long commutes, expect to pay a higher premium compared to someone who only drives occasionally. 

What is the relationship between risk and premium insurance? Well, the more risk you present (in this case, by driving frequently or for long distances), the higher your premium will be. However, if you can reduce your mileage or use your car less often, you may be able to lower your premium. 

  

4. Location and Occupation

  

Where you live and work can significantly impact your car insurance premium. Urban areas with higher traffic and theft rates generally come with higher costs. If you live in a rural area with fewer vehicles and less traffic, your rates may be lower. Similarly, if your car is parked in a garage rather than on the street, you’re less likely to face theft or damage, which can help lower your premium. 

Your occupation can also influence your car insurance cost. Insurers may offer discounts for occupations considered to be lower risk, such as teachers or office workers. Higher-risk jobs, like delivery drivers or those with frequent driving, tend to have higher premiums. 

  

5. Penalty Points and Claims History

  

Penalty points and previous claims are both factors that can increase your premium. If you have points on your licence for speeding or other traffic violations, insurers will view you as a higher risk. Similarly, if you’ve made previous claims, particularly ones related to accidents, your premium will increase. Insurers consider your claims history when calculating the risk of insuring you. So, if you have a record of frequent claims, you may face steeper premiums.

6. The Level of Cover

  

The type of coverage you choose also impacts the cost. Third-party insurance tends to be cheaper than comprehensive cover. However, it provides less protection in the event of an accident. If you want to lower your premium, you might opt for third-party cover. If you want more extensive protection, expect to pay a higher premium for comprehensive cover. 

  

Understanding what impacts insurance premiums can help you make informed decisions. Factors like your age, driving experience, and claims history all play a role in determining the cost of your premium. By considering these factors and making adjustments, you can potentially reduce your premiums. 

At CoverInAClick.ie, we offer competitive car insurance quotes to help young and learner drivers get the best deal on the market. If you’re looking to save on car insurance, get a quote today!