The price of car insurance is a significant part of your motoring costs each year. The following information will provide you with information on some of the factors that may affect an Insurance Companies decision as to the premium they would charge.

The premium is based on a lot of information, primarily;

It is vitally important that you give your insurer full and honest information and always keep them up to date if your Insurance details change.

You and other drivers on your policy

Your age, occupation and driving history can all affect the price you are quoted and likewise for any person who you may decide to add to your policy as a named driver.

Age/Experience – Statistics would suggest that young or inexperienced drivers would be more likely to have an accident hence insurance companies would tend to charge higher rates. Young inexperienced drivers would generally be the highest risk for Insurance Companies and where Insurers would be prepared to quote, premiums would be very high even if they are only a named driver on a policy.

Previous incidents – Insurance companies will always ask about what accidents you have had in the past together with any other losses or claims irrespective of whether you were at fault or not. They would generally be interested in incidents within the last five and Insurers could charge a higher rate or decide they do not wish to quote depending on the incidents disclosed.

No Claims Discount – Each year that you insure your car, and do not make a claim on your policy, you earn a year’s worth of no claims discount (also known as “No Claims Bonus”). The more no claims discount that you accrue, the cheaper the cost of the insurance. Insurance companies have different levels of no claims discount but in general you start off at Zero and attain the highest level of no claims discount when you have been claims free for five years on a policy in your own name.

Driving Convictions/Penalty Points – Insurers ask separate questions regarding whether any driver on the policy to be Insured has been disqualified from driving, convicted of any motoring offence, have a pending prosecution for a Motoring offence or received any previous penalty points. As evidence suggests a correlation between the number of convictions or penalty points a person may have and how likely they are to make a claim, Insurers could impose increased charges depending on the frequency and severity of the offences. Motoring convictions such as drink driving are taken very seriously by Insurers and convicted drivers returning to the road will undoubtedly have to pay a substantially higher premium than before their conviction. These higher premiums could be charged for a number of years after the incident has occurred or may result in Insurers being unwilling to provide a quotation at all.

Occupation – What you do for a living can make you a higher risk for an Insurance Company. Some insurers might class certain Occupations such as a sports professional, entertainer or barman in a higher category amongst others, or they may charge higher rates if your job entails you predominantly being in your car such as a Sales Rep.

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The Car you drive

All Insurers will assign a car group to every car which is sold in Ireland and this is a large factor in the rate they will charge. Some Insurers may have as little as 10 different car groups encompassing every single car whereas others may have as many as 100 different groupings. Amongst other factors, the insurance group is a measure of how expensive your car is to repair, how powerful it is and how secure.

For instance if an Insurer had 20 different rating groups, group 1 may be a very small car such as a Nissan Micra and rating group 20 may be a high-powered or luxury car such as a Porsche. In general the more powerful a car is, the more likely it is to be involved in a high speed accident (which cost more to repair than lower speed accidents).

Some Insurers may not offer cover for vehicles above a certain car group if you are under a certain age, inexperienced or have a provisional driving licence.

Car Age / Value

It is a common misconception that the value you Insure your car for will affect the premium charged by an Insurer. Generally Insurers would rate based on the year of the vehicle and not the Insured value, however some Insurers may impose higher charges for very expensive vehicles over a certain value ie €70,000 +. The value you state on the policy should always adequately reflect the current market value of your car.

Car Security

Some Insurers may apply a discount if you have fitted an alarm, immobiliser or tracking device to your car.They may also offer a discount if your vehicle is kept overnight in a locked garage.

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Where you Live

Where you live is key part of your price calculation and each Insurer would have differing rating areas similar to how they rate cars as detailed above. In general you will pay more if you live in a more urban area. Increased density of traffic and people could mean a greater chance that your car will be involved in an accident, become vandalised or stolen. You must always state the address that your car is primarily parked overnight.

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Vehicle Use

Depending on how you will use your car will affect the premium charged by your Insurer for instance if you are only driving your car for normal day to day activities such as visiting friends or going shopping you will pay a lesser rate than if you use your car for business purposes.

The main levels of business use are briefly described below together with a general description of what they would allow you to use your vehicle for.

Social, Domestic and Pleasure Use – This would be the cheapest class of use and would cover you for using your car for Social, Domestic & Pleasure purposes only including commuting to and from one permanent place of work.

Class 1 Business Use in Person – This would cover you for using your car for Social, Domestic & Pleasure purposes and use by you in person only in connection with your business or profession excluding commercial travelling, carriage of goods or samples, or the carriage of passengers or goods for hire or reward. This class of use would generally be more expensive than Social, Domestic & Pleasure.

Class 2 Business all Insured Drivers – This would cover you for using your car for Social, Domestic & Pleasure purposes and use by any insured driver in connection with your business or profession excluding commercial travelling, carriage of passengers or goods for hire or reward. All Insurers would charge a higher rate for this class of use.

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Levels of Cover/Additional Benefits

Insurers would charge different rates based on whether you have chosen to Insure your car for Comprehensive or Third Party fire & theft benefits (See our Motor FAQ section for details on the main differences between these levels of cover) but there are other additional benefits that you could choose for which an Insurer may charge a higher or lower rate. Some examples are listed below;

Protected No Claims Bonus – Where you request to protect your no claims bonus all Insurers would generally charge a higher rate for this additional cover.

Trailer Cover – Some Insurers would increase the level of cover to Insure a Trailer while coupled to your car, and also while uncoupled subject to certain criteria being met and the appropriate rate charged.

Excess – Some Insurers may have different excess options where you could either increase the excess amount for a cheaper rate or decrease the excess amount for an additional rate.

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