Heels & Horsepower Magazine


5 Factors That Affect The Cost Of Your Monthly Insurance Premiums

By H&H Admin

Your car insurance costs are, in a way, a reflection of who you are as, in most instances, the rates you pay are determined by factors such as where you live and your driving history. 

Car accidents can be extremely costly particularly if your vehicle is badly damaged or if someone is injured. The role of car insurance is to help cover the costs and protect you from potentially devastating financial liability.  

It is estimated that 70% of the vehicles on South African roads are uninsured and many motorists cite the high cost of monthly premiums and the soaring cost of living as some of the reasons they drive uninsured.   However, insurance premiums are not a one-size-fits-all and are based on the unique characteristics of each driver.  

Here are a few factors insurance companies use to determine the cost of your monthly premiums.

1. Demographics

Your age, gender, and marital status all contribute to your car insurance costs. People younger than 25 are considered a high-risk group because of their inexperience as drivers. As a result, they may pay more for insurance.

Women’s car insurance is generally cheaper than men’s because statistically, men get into serious accidents more frequently. If you’re unmarried, you may also be paying more for car insurance than your married friends.

2. Location / Address

Your address could also be a reason for your high insurance rates. If you live in an area with a high crime, hijacking or accident rate, the likelihood of damage or loss to your car increases. Therefore your risk to the insurer is higher, and so your car insurance premium rates will be higher.

3. Car Make and Model

The make and model of the car you’re insuring influences your monthly premiums. Expensive or modified cars get higher insurance rates because they are more costly to repair or replace when damaged. Similarly, older vintage cars are also more expensive to insure if their parts are not readily available.

4. Driving History

If you have a history of traffic fines and car accidents, an insurer will consider you a high risk, and you’ll be left with increased car insurance rates.

5. Credit Rating

People with poor credit scores are charged higher car insurance premiums. Having a bad debt repayment record indicates a decreased ability to keep up with monthly car insurance premiums.

You may not be in a position to do anything about your age or residential area but you most certainly can become a better driver.  

Minimising in-car distractions and being more mindful of your driving habits and environment are within your control and can work towards helping you to reduce your monthly insurance premium costs.

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