press releases

It's all about risk

Ever wondered why you get asked so many questions when you insure your car? Well the insurance company needs to work out what kind of risk you are to calculate your premium. Y our age, where you live, the car you drive, even your marital status will all affect how much or how little you have to pay. So what affect do these risks have on premiums?

Online car insurance expert, elephant.co.uk has looked closely at the different risks to see what affect they have on an average low risk motorist. Some factors can push premiums up by over 200%.

All insurers rate on a range of factors, these include:

• Age
  
• Address
  
• Occupation
  
• Gender
  
• Make and model of vehicle
  
• Where the vehicle is parked overnight
  
• How you will be using the car
  
• Estimated annual mileage
  
• No claims bonus
  
• Number of drivers
  
• If you drive other cars
  
• Motoring offences
  
• Claims history
  
• Whether or not you have children
  
• Security on your car
  
• Modifications to your car

Managing director of elephant.co.uk, Tanzie Oliver said: "This list may seem very long and I am sure some people are surprised by the questions they are asked by insurance companies, but we need to have as much information as possible in order to calculate an accurate premium. This is based on many years worth of data and allows us to work out who is a low risk and who is a high risk."

Some of the risk factors are more important than others, particularly age, address and vehicle details. This is because they have the greatest affect on the likelihood and cost of a claim. elephant.co.uk looked at how these three areas factors can affect the premium of an average motorist.

John Smith a 35-year-old married bank worker living in the quiet English town of Fareham, driving a Citroen Xsara Picasso 2.0 Hdi. A typical quote for him would be about £260. However if his age, address or vehicle change, his premium rises. This is because he becomes a higher risk, and is more likely to cost the insurance company more in claims.

Prices based on averages between elephant.co.uk and five other leading insurers

So why do these three factors in particular have such an affect on premium? Tanzie Oliver explains: "Put simply, young people are involved in more accidents because they are less experienced at driving; car crime and accident rates are higher in city centres than in rural locations; and expensive cars are more appealing to car thieves and cost more to repair if they are involved in an accident."

Issue date: 09-03-05