Vehicle insurance premium is an expense that you always want to be minimized. Following are five factors that determine the premium on your vehicle insurance.
Age, Gender and Marital Status
The basic demographic facts like age, gender and marital status can affect your insurance premium both, positively and negatively. Generally, drivers in lower age group are at greater risk to involve in an accident. That is the reason why they are charged with higher premiums.
As another fact, male drivers in the UAE are liable to pay high insurance premiums. The reason is obviously the statistics showing less number of females involving in road accident. Similarly, married individuals drive more safely as they are mostly accompanied by the family, and are hence eligible for discounts.
Individual Driving Record
Individual driving record plays a vital role in determining the insurance premium. In UAE, when the insurance company finds that you have had an accident in the past or you have been involved in some kind of traffic law violations, they would certainly levy a higher amount of premium.
While determining the insurance premium on your vehicle, companies also analyse if you have claimed insurance in the past or not. Driving record that is clean and free of claims would benefit you in minimising the insurance premium.
Credit Rating
Your credit history is analysed by your car insurance provider. The company wants to make sure if you would be able to pay timely premiums or not. That is the reason why poor or no credit history can put on higher risk, hence making your pay higher premiums.
Education and Occupation
Although your education level has a lower impact on your annual insurance premium, it can still save you a few Dirhams. Higher academic qualification is directly proportional to lower insurance premium, in some cases.
Another factor influencing the insurance company’s decision of defining premium is your occupation. If you are engaged in a job that requires you to travel all day, it puts you on higher risk. On the other hand, a job that allows you to sit in office may entitle you for insurance premium discounts. In other words, the more is the driving distance to your workplace, higher will be the insurance premium.
Type and Use of Vehicle
The type of car you own or driver matters a lot in determining the premium. Expensive and luxury cars usually have higher insurance premiums, as its restoration cost at insurance claim is greater. In addition, safety and control features of the vehicle can make it suitable to claim discounts. Modern features like Traction Control, Cruise Control and Automating Braking systems put a positive impact on your insurance premium.
Please note that vehicles under personal and commercial use are treated separately by the insurance companies. Commercial vehicles usually have higher insurance rates as well as greater premiums.
We hope now you are aware how to effectively reduce the annual premium on your vehicle insurance.