Car Insurance Companies
Car insurance companies work like most other businesses. They offer a service, in this case insurance for your car, and aim to write as many policies as possible. Of course they want their income – your premiums – to be greater than the money they pay out in claims by people whose cars they insure. Car insurance is a highly competitive industry and that’s why you, the car driver/owner, should take your time in choosing an insurer who offers the best deal and the best value for money.
Basically when it comes to car insurance comparison, there are four types of insurance. One is compulsory. You have to pay for CTP or Compulsory Third Party insurance and you do this when you register your vehicle. But there are three other types of car insurance and insurance companies offer variations in their policies on each. It’s your job to choose the right company for your car. The other types of cover are:
- Third party property and
- Third party fire and theft
Now there are certain facts about car insurance companies which apply to everyone. These facts include the following.
- The cost of your vehicle affects the premium you pay
- Your driving record is important
- The location or housing of your car is important
- How often you drive is a factor
- Where you live can make a difference
When you make a comparison of the various insurance policies, consider all the above points and more. It’s important you have a list of questions you can ask each company. They want your business but do you want their particular policy?
If you have a new car in the luxury range and one which costs far more than the average new vehicle, then your premium will be higher than someone who has an average vehicle which is many years old. Companies fix premiums according to the likely payment they may make in the event of a claim. Replacing a new expensive car will cost the company far more than an old and inexpensive vehicle. So your premium will reflect your cover.
Companies like to insure what they call a ‘good risk’. If you’ve never made a claim or rarely done so and if you have a clean driving licence, you are considered to be a good risk. If you’ve been in several accidents and made claims over recent years, the company may reject your application, or, if they accept you, charge you a higher premium because you are considered a bad risk.
It’s possible for you to pay too much for your car insurance because you have the wrong or unnecessary cover. That’s your responsibility. If you have your car locked in a secure garage as opposed to it being parked in the street at night, you are a better risk when it comes to theft of your vehicle. It’s much easier to steal a car from the street than from a locked garage. This should be reflected in your policy.
Likewise if you use your car a lot, driving many kilometres most days then the chances of you having an accident are greater than someone who only uses their car on a few occasions and then mainly for short journeys. Companies consider all these factors when giving you a quote so you should be doubly sure your premium is appropriate.