What you pay in Car Insurance premium may be very different, not to mention exorbitant, from what your colleague is paying for a similar drive. There are several factors that escalate your car insurance premium, some of which may even seem beyond your control.
Here are some common reasons why your car insurance premium may be over the top.
1. Driving Record
Traffic violations and black points taint your driving record. This may have a direct impact on your insurance premium since you will be considered an unsafe driver and a liability in the eyes of your insurer.
If your insurance premium is shooting up every subsequent year because of blemishes on your driving record, it is worth exploring the corrective courses on driving offered by the Dubai and Abu Dhabi Police which may get some or all of the black points off your record.
2. Demographics
Car insurance rates are a clear reflection of your age, sex and marital status. Insurance agencies price their premiums by risk and the likelihood of an individual getting into an accident plus the historical statistics of accidents based on demographics are the deciding factors for companies when formulating the premium. Young and single male drivers are the most expensive to insure.
3. Policy Type
The particulars of your policy as well as deductibles play a significant role in your insurance premium. A higher deductible translates to a lower insurance premium and vice versa. In addition, there is always a chance you may have added unnecessary additional coverage or paid for coverage you already have elsewhere which may have led to the increased cost.
4. Car Make and Model
Insurance providers are very stringent in the matters of vehicle safety. Consequently, the premium spikes for pricey and high-performance vehicles more susceptible to damage, occupant injury or theft.
The same applies to modified vehicles. It is advisable to do some research on safety ratings versus insurance premiums before getting your car modified or purchasing a modified version.
[What’s Really Happening With Car Insurance Premiums?]
5. Claims History
Your insurance claims in the preceding years not only affect your no claims discount, they also affect your premium upon renewal of policy. It, therefore, makes sense to pay for small damages out of your own pocket if you don’t want your premium to shoot up the following year.
6. Credit History
Your credit history is predictive of future insurance claims. Many insurance companies use credit scores to determine the cost of car insurance. Also, unlike your demographic standing, this is one area where you can exercise control over your premium rate.
This credit history system for gauging a person’s individual risk, however, is still in the evolving phase in the UAE.
7. Overlooking the Importance of Quote Comparison
It is important to shop around and get quotes from at least 3 different companies before you settle on a policy. This will not only help you land the plan that is most suitable to your needs, you can get the best value for your money.
