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What Determines Your Cost of Car Insurance?

If you’ve insured a car before, you may have noticed the premiums vary a lot depending on your car and personal circumstances. Additionally, each company usually has a unique list of approved smash repairers to use in the unfortunate event of a car accident.

This article shares some of the defining factors that will determine your cost of car insurance.

It’s important to note, each car insurance company determines the cost to cover your car differently, so some of the factors below may not impact you.

Car characteristics

Car value

The current market value of your car, as determined by the insurance company, is the most obvious decider of your car insurance premium. The more the car is worth, the more it will cost to insure. Therefore, new, or rare cars are usually more costly to insure.

Cost to repair

If your car requires high-quality parts, or parts are hard to come by, this means the cost to repair is higher. Insurance company approved smash repairs will know the feasibility of repairing a car, therefore determining the insurance cost.

On the flip side, popular cars with cheap and easy to source parts will cost less to insure.

High-performance or modified cars

High-performance cars are usually pricier than your run-of-the-mill car to begin with, so will cost more to insure. The added performance benefits could increase your insurance premium yet again, since more performance means more speed, a greater risk of an accident, and more insurance approved smash repairs.

Even if your car isn’t worth a lot, a car with performance modifications is likely to cost more to insure. Examples of this are aftermarket exhausts, improved suspension, and engine modifications such as a turbocharger.

High-theft cars

Much like cheap but modified cars, vehicles with a high-theft rate are bound to cost more to insure. This is due to the high-risk of a car being stolen or damaged, and needing replacing.

Safety rating and security

In some scenarios, a car with additional safety and security features may qualify for extra insurance savings.

Personal factors

Level of cover

The level of car insurance will play the leading role in determining your insurance costs. The better the coverage, the more it will cost. For example, a comprehensive car insurance policy is more expensive than a third-party policy. Some insurance companies can include optional extras like windscreen and glass cover for additional fees.

Age and gender of driver

Statistically, young men are more likely to drive recklessly and cause accidents, usually placing them in a more expensive insurance bracket. Likewise, if you’ve just started driving, the inexperience will cost you in insurance premiums. Car insurance for young drivers will decrease in cost overtime as they move out of the high-risk ages – pending a good driving history.

Home Address of car

Car insurance companies may adjust your premiums depending on the location of the car overnight. If a car is parked on the street in an area with high car theft rates, your policy is likely to cost more than if your car is garaged in a safer suburb. Similarly, some regions in WA may charge more for car insurance if there is a greater risk of a natural disaster.

Historical Claims

Your driving history can make or break the cost of your insurance policy. If you’ve had an accident recently, insurers will assume you’re more likely to have a repeat outcome. The more insurance claims you make and the more approved smash repairs you need, the higher the costs.

In time, a good record will reward you with a lower premium but paying extra for a few years can take its toll. It may be worthwhile looking at a reduced cover or a new provider if prices are too steep.

Car usage

The more you drive your car, the more likely an accident is to occur – no matter your driving ability. Most cars in Australia drive an average of 13,000 kilometres every year. If you drive substantially more than average, there’s a good chance it’ll raise your insurance cost. Alternatively, if you hardly drive at all, you may qualify for a cheaper policy.

Choosing a repairer

When you’ve had an accident, it’s possible to choose your preferred approved smash repairs workshop. If you need an approved smash repairer, get a quote from us.


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