Car insurance is one of those things we all love to hate – however… if you take a few minutes and truly understand what you gain it could change your perspective forever.
So we all know that insurance is the pooling of risk so that we pay a small monthly price to get a lot of protection. Great! How much is that small monthly fee? Well that depends on a few factors:
1. Your credit score
This probably says the most about you than any other indicator available in the market. The better your score the more likely you are to pay your premiums, as well as look after your property better etc etc.
2. The value of your vehicle
Obviously the guy driving a 750 BMW must pay more than us guys and gals driving around in VW Polos right? Not always. The chances of a polo being stolen is much higher than a BMW. On the flip side it is much cheaper to repair polos that have been damaged in an accident. So you can already see the vast difference the vehicle makes in terms of risk.
In general though the value of the vehicle still makes a big portion up of the risk premium.
HANDY TIP: Always make sure you are covered for ‘Retail Value’. This is the higher amount and probably in line with what you will need to replace your current car.
Your age, gender, marital status and where you live also makes a difference to the premium you pay. A newbie 19 year old driver on average makes more accidents than an experienced 45 year old driver. Single boys also like to show off their moves so chances are they going to take a risk here and there 🙂
So that is briefly a breakdown of what car insurance is, and how car insurance works.
Why if your car loses value – does my premium go UP every month?
That is the golden question King Price Insurance is answering! For years it was accepted that this is how insurance works. NOT ANYMORE!
The only logical explanation is inflation, but the value of the car depreciates. Yes repair costs, labour and parts gets more expensive (and that is why you get annual renewals or annual increases), but still the replacement value is less – should your car get stolen which makes the cost of repairs and labour irrelevant.
Because your car loses some value every month King Price Insurance has decided that they will discount your premium… EVERY MONTH!
That sounds fair right!? And…. there’s more! They are super cheap 🙂
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