factors that influence your car insurance premium in south africa

The insurance industry is a world of calculated risk. Car insurance companies base their rates on how likely you are to file a claim in the future, and they use a number of varying factors to determine that risk. While it is impossible to know the exact formula any auto insurance carrier uses to calculate risk and determine premium rates, knowing common rating factors can help you shop smarter for your car insurance. Below you will find 9 factors that influence your car insurance premium in south africa.




1. The region in which you live

Insurance companies determine auto insurance rates based on your location. So, if your area has high rates of theft or insurance claims, unfortunately you can expect to pay more for auto insurance to offset these costs. Also, highly populated areas have higher auto insurance rates, as you are more likely to be involved in an accident due to the increased congestion and vehicles in a given area.

2. Your insurance history and previous claims.

This is vital information, which can be verified using industry data.  If you had a car insurance before, the frequency of claims you made, will affect your insurance premium.

3. Make and model.

It’s not just you, but also the vehicle you drive which determines the premium. Typically, more expensive cars will attract a higher premium as they are more expensive to repair in case of an accident and cost more to replace if stolen. However, those cars which are easily stolen (or which are regularly targeted by criminals) present a greater theft risk and therefore will attract higher premiums too.



4. Driving experience

As previously mentioned, among the factors used to determine a premium is age. Younger drivers, in particular, regularly consider this to be unfair. However,statistical evidence shows that younger drivers are a higher risk. These drivers are more likely to have an accident due to a lack of experience on the road. Older drivers are less likely to get into an accident and therefore have lower-priced premiums.

5. Modifications.

You must disclose any changes made to your vehicle that are not classed as factory standard and made after it was produced. This could include engine modifications, alloy wheels, spoiler or sunroof.

6. Security features.

If you have a tracking system, you are a lower risk and will get a discount on your premium. In most areas, an immobiliser/alarm is obligatory.

7. Business or private use?

If you use your car for business you will pay a higher premium, because of the higher risk.

8. Where the car is parked at night.

It is safer (and a lower risk to the insurer) if it is behind locked gates or in a locked garage.

9. Age, gender and marital status

Among the factors which will determine the premium you pay for your car are your gender, age, marital status, where you live and a financial background check. These factors have a bearing because the statistics collected by insurers show that they have an effect on the likelihood of accidents or other incidents – while financial checks provide an indicator of the possibility of making unjustified claims.



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