There are costs of buying car insurance. These costs are by way of premiums payable for the purpose of enjoying car insurance coverage in any country whatsoever. To enjoy the coverage, the cost must be paid in advance to the insurance company without which no insurance contract will crystallize. In this article, we shall discuss the factors that influence the cost of car insurance generally.
You might wonder why car insurance prices vary so much. Several factors affect the costs:
AGE OF THE CAR
Generally, the cost is usually lower to the cost of premiums for newer cars. In other words, an older vehicle costs less to insure compared to a newer ones. New vehicles have a higher market value, so they cost more to repair or replace. Also, spare parts are easier to find for older vehicles if repairs are needed.
Similarly, the newer cars have the risk of theft more than the older ones because they are usually more attractive and modern.
AGE OF DRIVER
The age of the driver is equally another important factor that determines the costs of premiums. Generally, the costs of car insurance for younger drivers are higher than the cost for older drivers. The reason for is not far- fetched. The older drivers posses more experience that of the younger drivers. Similarly, the effect of youthful exuberance also presents more risks of accidents as young people tend to be more involved in rough driving than older persons.
THE INSURANCE COMPANY
The cost of car insurance equally depends on the insurance company in question. Some insurance companies charge higher premiums than others
MARKET PRICE OF THE CAR AS FACTOR FOR COST OF CAR INSURANCE
The higher the value of the car, the higher the cost of the insurance premiums. The insurance company will consider the cost of replacing the car in the event of loss of theft in fixing the premiums.
Also, in the event that the car damaged parts is to be replaced, the costs of the spare parts for the replacement will equally influence the cost of premium.
THE AMOUNT OF INSURANCE OR COVERAGE AMOUNT
Some car insurance plans specify the limit of coverage to be provided by the insurance company. In this case, the higher the insurance limit, the higher the cost of premiums. In contrast, the lower the insurance limit, the lower the cost of premiums.
MAKE AND MODEL OF CAR
Some vehicles cost more to insure than others. Luxury and sports cars usually have higher insurance premiums because their market values are higher.
RISK OF THEFT AS COST OF CAR INSURANCE
Certain vehicles regularly make the frequently stolen lists, so you might have to pay a higher premium if you own one of these.
THE TYPE OF CAR INSURANCE
The type of car insurance plan one intends to purchase will influence its premium. for Instance, the cost of third party car insurance will usually be lower than the cost of comprehensive car insurance policy. This is because, the level of coverage offered by the different plans differ in scope and financial implication
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