How you affect your premium

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Car insurance premiums can vary quite dramatically, with even apparently similar people with similar cars having very different premiums. Why? Because there are all sorts of factors taken into account when setting the premium. Ultimately, the lower the apparent risk, the lower the premium.

There are lots of ways that a driver's characteristics can impact on the price of their car insurance premium.

Your age

Unfortunately, statistics show young drivers are considerably more at risk of having an accident than older drivers. Partly it's down to having less experience, partly because young drivers are overconfident of their abilities.

Your gender

Statistically, women drivers are safer than men, and that used to mean they benefited from a lower premium. However an EU ruling declared that is discriminatory, so from December 2012 gender can no longer be taken into account when calculating a premium. This will particularly affect young women drivers, who traditionally enjoyed much lower premiums than males the same age.

Where you live

Your home address, where you drive your car and where it's kept also affects your premium. If you live in an area with a high number of accidents happening, this will impact the price we quote - we consider both the frequency and type of accidents that are happening.

Some areas also have more car crime than others, and if your car is kept in an area where we have seen more cars stolen or broken into, this can affect your premium. Similarly, cars that are parked on the street overnight are seen to be more at risk than one on a driveway. 

What you drive

It stands to reason that a very expensive sports car, which would cost a lot to repair or replace and is more likely to be driven fast, is more expensive to insure than a little 1.0 litre runaround.

What your car is worth is also another factor: clearly it will cost more to replace a £30,000 car than a £500 car. The insurance industry has set up insurance groups to decide which car falls into which group. Other things that can affect the premium are whether it's an import, if it's left-hand drive and if it's been modified (and that includes mods like wider wheels, as well as a tuned-up engine).

Your job

Some professions are reckoned to pose a higher risk than others. That's because insurance companies keep a record of the professions of people involved in accidents, and have a database showing who's most likely to make a claim. Teachers, for example, are reckoned to be a good risk, but professional entertainers and footballers, publicans and bookies are all reckoned to be high risk.

You have to be honest, though. If you say you're a civil servant when you're really a pub landlord, you'd almost certainly find out that your insurance was invalid.

Your experience

The longer you've been driving (usually) the less likely you are to have an accident. You've acquired the skills that help you minimise risks and cope with difficult conditions. So if you've been driving for years without making a claim, you should be entitled to a No Claims Bonus, which is a very effective way of reducing your premium.

You can also bring it down further still, by proving how good a driver you are. You can develop your skills and take a test with IAM RoadSmart and, if you pass, you could well get a discount on your premium.

For more information on how your home insurance price can be generated, check out our article on what can have an impact