Factors used to determine insurance prices and how to use them to your advantage.

"Winners and losers in the premium wars"

It seems that when it comes to car insurance there are winner and then there are losers.

We will take a look at some of the factors used to calculate the premium and hopefully give a few ideas and insights on how to get the cheapest car insurance deal you can.

Insurers work in a similar way across the world but this article has been written based on 14 years of experience working within the UK insurance industry.

Driver factors are one of the largest the insurers look at. An underwriter looks at his pool of statistics to decide which drivers are most likely to make a claim.

Each insurer builds up a profile of who they consider to be high risk and unprofitable and raise premiums. Conversely there are those percieved as low risk and profitable and the insurers will look for ways of attracting these drivers.

Age is a big factor. The younger and more inexperienced you are behind the wheel the greater your chances of making a claim. There is little that can be done about this other than minimising your risk by getting a relatively safe car. At least by doing this you are paying a loaded low premium ready for the future when you will have a no claims discount and good record in your favour.

Sex is also a factor. Despite the pub arguements women drivers cost the insurers less. The debate rages on in TorqueCars forums as to whether women have more but smaller accidents than men so you might want to wade in and let us know what you think on that! Despite the arguements and debates insurers love women drivers and they get lower premiums.

Sometimes there is a saving to be made insuring the car in your wifes name (you must be 100% honest about who the main driver is though) and we have also heard of some members getting a discount by adding a female to their policy.

The area in which you live will play a large role in the amount of percieved risk. Inner city areas cost more than outlying rural areas to reflect the higher inner city repair costs, the heavy traffic and increased risk of a colission and the increased vandelism and theft risk.

Short of moving home you may get a discount if your car is parked off the road or if you do a limited mileage each year. If your car is garaged overnight or you agree to use the car only during daylight hours (verified by a tracking device) you can get reductions in your premium.

Also adding a good quality insurance approved car alarm can help reduce the premium further. Some types of high theft risk car attract discounts if the owners fit them with a tracking device which greatly increases the chance of recovery of the car.

The type of car is also a factor in the calculation of the premium. Things taken into account for the rating of each car include the safety ratings awarded to each car, which have a direct bearing on injury claims, both from occupants and pedestrians.

The power of the car and its handling ability which includes its braking and the size also determine the frequency and amount of claims made. Faster and larger cars will attract higher premiums than small or slow ones.

Add to this the typical driver profile of a car and you find anomolies like Diesel automatics are lower to insure than a petrol manual of the same power and specification. Also some 3 door hot hatches cost more to insure than the similarly powered 4 door hatches again due to the typical profile of the driver.

The repair cost and ease of repair is also a factor. You will usually find that locally manufacturered vehicles cost less to insure than those designed and produced in other countries.

Whilst we are on the subject of countries many insuers will decline to insure personally imported cars due to the perception that parts of a suitable specification are harder or at least take longer to source. This is partly why imported cars depreciate more quickly.

Be honest at all times with your insurer. They will ask very specific questions at the time of a claim and ask for proof. For example an insurer may not want to see your licence when you take out a policy but may want to see it if you make a claim to verify you have no endorsements.

Previous accidents and claims are stored on a database which is again often only consulted if you make a claim. Giving false information to obtain cheaper car insurance is a false economy as you will find yourself without cover and open to prosecution.

Modification to a car must also be declared, no matter how small. It can be a challenge to get cover for modified cars but we have covered this subject in another article.

When you are on the phone don't be afraid to haggle, often the call center staff can obtain further discounts to secure a sale and many are target driven so will actively negotiate with you.

Surprisingly the value of the car is rarely a rating factor so be sure to declare the full replacement value of the car, especially if you got it cheap. The declared value is often the upper ceiling of any offer made in the event of a write off.

Other things you can do which may reduce your premium include advanced driver courses such as the Pass Plass from the UK for new drivers and membership to the institute of advanced motorists. Any driver training will make you a safer driver and as safer drivers make fewer claims you will enjoy much cheaper insurance in the long run.