When insuring an automobile, insurance firms evaluate many criteria to establish the premium that a
policyholder would need to pay. However, once obtained, automobile insurance premiums may fall after
a set time.
What are the Factors that Influence Car Insurance Premiums
When deciding the pricing of automobile insurance, carriers take a variety of things into
account as stated below.
Note: If the insurance company detects any contradiction in the information given by policyholders, they
may raise the price or cancel the auto insurance plan completely.
1.Featuresand Variant of the Car
The major factor to determine the auto insurance premium is the version and model of the car. Insurance
companies prefer to establish higher rates for luxury and costly automobiles, the rationale being that
these cars are fitted with pricey replacement components. In case of damage, concerned firms
would need to pay extra to fix them.
However, if such automobiles are constructed with additional safety measures, carriers charge a
reduced rate since the chance of car damage diminishes.
2.Age and Driving Experience of the
The second crucial criterion to examine a vehicle insurance premium is the age of the driver. As per
numerous studies, persons who fall below the age of 25 are likely to pay a larger cost for their automobile
plans than those on the other side of the limit.
Since persons within this bracket often lack expertise in driving, they are more prone to accidents as per
most carriers. Apart from this, even if people are over 25 but have fewer driving experience,
insurance firms charge a higher auto cost.
The history of your automobile also influences your car insurance prices. If a vehicle has undergone
repeated accidents or the driver has gotten numerous penalties for traffic offences, the relevant
company might demand a hefty premium. Note that higher rates are also levied in case the motorist has
filed multiple claims in the past.
4.Limitations or Excess
The excess or deductible is another key aspect that affects a vehicle insurance rate. It is simply the
amount that a policyholder needs to pay for a claim before the provider pays the remaining claim
amount. With an increase in the deductible amount, the auto premium reduces and vice versa.
5.Repairing Agencies or Non-Agencies
It is essential to include repairs in coverage when getting auto insurance in the UAE. Policyholders may
choose between agency and non-agency repairs. Individuals must choose agency repair to have their
automobile fixed by the car’s official dealer. A non-agency service, on the other hand, is one that is
performed at independent garages/workshops and is authorized by the relevant auto insurance carrier.
Those who wish to include agency repairs in their plans must often pay a higher premium.
Fundamentally, riders are extras that you may purchase on top of your standard plans. Some add-on
coverage from car providers has a set price, while others are provided without charge. The cost
of your insurance will go up if you choose add-ons that cost a certain amount.
In the UAE, the area where the automobile will be driven is also considered when determining the pricing
of car insurance. For instance, if your automobile is registered in a place where the infrastructure is
poorly developed, you would be charged a higher premium since your car would be more prone to
accidents or damages in general.
When Does New Driver Car Insurance Reduce?
- After learning about the elements impacting vehicle costs, we will now address when does car insurance go down for new drivers. As we saw before, the age of the policyholder considerably adds to the variety of vehicle prices.
The legal age for driving in the UAE is 18 years. However, irrespective of age, the auto price
might vary for both men and girls owing to several variables.
When Does Car Insurance Decrease for New Drivers: Men vs. Women
Insurance companies often prefer to charge a higher vehicle rate for male drivers if they are
below the age of 25 years. As per studies, firms tend to view male drivers as riskier to insure
than their female counterparts.
By the time, persons reach the age of 26-30 years, however, they are deemed more responsible drivers.
Thus, the automobile price for persons in this age bracket falls.
However, the lowered rates may also differ based upon the experience of the individual in driving. Car
insurance firms normally charge a higher price for drivers with minimal experience; experienced drivers,
on the other hand, may receive the plan for a reduced rate.