What's Included?
Introduction to car insurance criteria
Car insurance: a sticky, messy, expensive ordeal that every car owner has had to wade through. Premiums for new drivers can be sky high and rocket even further based on factors some may never consider being important. It can seem impossible to know what will hinder you from getting the best car insurance deal possible, but here are a few car insurance criteria you should consider so you don’t get any nasty surprises when insuring your new wheels.
Age
This one is obvious: the younger the applicant is, the more expensive the insurance premium will be. Younger drivers are generally considered to be inexperienced, immature, and are at higher risk of having an accident, meaning the insurance premiums for people under the age of 21 are usually very high. This factor isn’t usually one that can be helped, but being mindful of other aspects that impact insurance should help reduce the cost.
Gender
Another factor that there is no control over – the overall trend is that males tend to be quoted higher insurance premiums than females. Males are considered to be more reckless and accident-prone than women as statistically in Britain, men account for 74% road traffic deaths, 70% of serious injuries and 59% slight injuries on the road (source).
Who is counted under your car insurance criteria?
In many cases, the parents of younger new drivers will be the policyholders of the car insurance, with the younger driver as a “named driver” on the policy. This very often makes the cost of insurance much less as the main person being assessed for insurance is a more experienced, capable driver, even though the actual user of the car is also on the policy. In some rare cases, this is not true, and the following point will explain why…
Previous claims
If any of the named drivers have had a claim on their insurance in the past 5 years, the premiums will increase. Before adding any named drivers on your policy, it is important to double-check this to avoid any surprises. A real-life example of this is my own experience:
Story time!
On my insurance policy, my dad is the policyholder, with myself and my mum as named drivers. When applying for insurance online, we were told there were discrepancies with the information we provided and given a number to call. Upon calling the insurance company, we were informed that as my dad had a previous claim on his account with his previous insurance company, my insurance would increase by £400 a year.
The reason for this was as follows: 3 years ago, a reckless driver was in front of my dad, driving very dangerously and nearly causing accidents. As a result of his behaviour and nearly causing a collision, my dad honked his horn at this driver and thought nothing more of it, being careful to stay away from the car ahead. When my dad arrived at his destination, he realised the reckless driver had doubled back to follow him. The person then got a baseball bat out of his car and smashed my dad’s wing mirror off. As instructed by most insurance companies, the following day he phoned his insurance company and informed them of the incident but did not make a claim. This was logged as a claim regardless and could not be removed from his record – the knock-on effect of this means I now have to pay a higher insurance premium. Moral of the story: be sure to check the claims history of every named driver even if they do not think there is a claim on their account (and don’t honk at bad drivers even if you want to, you never know what could happen!)
Amount of time a driver has had a license
If a person has had a driving license for several years, insurance companies tend to assume that this person has been driving for that length of time. Therefore, you are seen as being more experienced and less of a risk to insure so your premiums will be cheaper.
Type of car in your car insurance plan
This is one of the most important car insurance criteria! The type of car you get directly affects the amount of insurance you will have to pay; a big engine, a car that is large in size and one that’s more expensive will naturally be much pricier to insure – especially when considering engine size! It is better for first-time drivers to get a car with an engine size of around 1-1.2 litres. It means that the top speed and acceleration rate of the car will be less and insurers see this as being a less risky choice for a newbie driver. Here is a list of cars that are good options for new drivers. If you want to know more about how car choice can affect insurance, read our blog post on the top 5 things to consider when buying your first car here!
Mileage and age of the car
Insurers will look at the number of miles a car has travelled and the overall age of the car to determine how likely it is to break down or have mechanical problems you may claim for in the future. If your new(ish) car is of considerable age and has been around a bit, then you can expect to pay more for it. Newer cars may be more expensive to buy in the first place, but you’ll save money in the long run on your insurance costs.
Addition of a black box
Having this speed tracking system placed in your car is a sure-fire way to get your insurance costs reduced. For as long as you have it installed, it will be constantly recording your driving activities – especially if you’re going over the speed limit – which the insurance company can check. If you stay within the speed limits everywhere you go (which you should anyway), this will prove that you are a safe and responsible driver and your premiums will be reduced. Your premiums will be cheaper in the first place anyway if you opt for the black box from the get-go.
Where you live
This factor isn’t normally one that people would take into account when applying for insurance, but it does have a heavy weighting on the premiums you will pay. More highly populated areas with more cars are much higher risk than rural areas with few vehicles as the chances of you having an accident are much higher. To balance this risk, your insurance cost will be more if you live in a densely populated city.
Finally – CREDIT!
Insurers do take your credit report into account when considering your application. Any bad credit or missed payments on your account are a red flag for insurance brokers as to them, it’s a sign you may not pay your premiums, resulting in being quoted a much higher rate. Of course, if you don’t want this to be an issue, you can sign up sort your credit with Credibble before applying!
Car insurance is highly complex with a wide range of factors that can affect how much you will pay. Taking into account the controllable elements listed above and being aware of the others means that you can make the most well-informed decision when applying for car insurance.
Credibble offers two fabulous solutions
If you’re preparing to take a mortgage, never apply until you’ve tried our unique and FREE Credibble Home app. Our smart technology will tell you what you need to fix so you avoid rejection. The app predicts when you will be able to buy, for how much and tracks your month-by-month progress to mortgage success. We’ve even added your own mortgage broker, so you get the best deals available.
More focused on your credit rating? Well, get started for free with Credibble’s 24- Factor Credit Check to truly help you improve your creditworthiness and how lenders view you. (Remember: lenders don’t use your credit score! We’ll show you what lenders look for and how to get your credit report in the best shape possible).
Last updated by Oliver Macmillan, May 2022
