Have you ever wondered why you’re paying so much for your car
insurance? That’s a valid question to ask considering price is one of
the biggest deciding factors among drivers looking to insure their cars.
Souqalmal.com has shortlisted seven of the most common reasons why
your car insurance premium may be twice as much as your neighbour’s.
A less-than-stellar driving record
A dodgy driving record marred with traffic violations, fines and
black points may be one of the primary reasons your car insurance
premium is too high.
A poor driving history is a red flag in the eyes of the insurer since
it goes to show that you’re an unsafe driver and may be a liability to
the insurance company. Overall, this puts your car at a higher risk of
being damaged, making it more expensive to insure.
The Dubai and Abu Dhabi police keep running corrective training
courses that allow motorists to have some or all of the black points
removed from their traffic file. This may be worth pursuing if your
driving history is forcing you to pay through the nose for your car
insurance.
The demographic you’re part of
Do you have a higher statistical likelihood of getting involved in an
accident? Insurance companies take into consideration historical
statistics of accidents based on demographics and factor that into the
insurance premium.
Certain demographics may inherently be more of a gamble to insure
than others. Your age, gender and marital status, all affect your car
insurance premium, but actuarial formulas vary from insurer to insurer.
For example, if you’re a young, single and newly-licensed driver, you
may end up paying a higher car insurance premium than someone who’s in
their forties, is married and has had a driving license for over a
decade.
The type of policy you select
You may be paying too much for your car insurance if you don’t select
your insurance plan carefully. Take your deductible for example – If
your policy has zero deductible, you’re going to be charged a higher
premium, while a policy with a 20 percent deductible will be offered at a
lower premium.
Certain provisions of your car insurance policy may be redundant with coverage you already have elsewhere.
For example, you don’t need to opt for roadside assistance if you’re
already covered by the car dealer’s roadside assistance plan, or you can
skip personal accident coverage if you have a personal accident
insurance policy already in place.
In other cases you may be paying for policy add-ons you’re never
going to need. For instance, you can give add-on features like off-road
cover and Oman extension a miss if you don’t plan to go on an off-road
expedition or beyond UAE borders.
Driving an unsafe car
Certain car makes and models are more expensive to insure than
others. If you drive a souped-up speedster versus a safe and no-frills
vehicle, you’re definitely going to pay a higher-than-average premium on
your car insurance.
Historical averages and crash studies put high-performance muscle cars at a higher risk of causing an accident.
You must also keep this in mind if you’re planning to modify your car
or buy a modified car. While car insurance companies may be willing to
cover the modifications made to your car, your insurance premium will
spike because modifications may jeopardise car safety and modified parts
also cost more to insure.
Making frequent insurance claims
If you make small and frequent claims, not only will you lose your
no-claims bonus, you will also be charged a higher premium upon renewal.
Therefore, it makes sense to pay for small fixes and repairs from your
own pocket to keep your next car insurance premium low. Treat your
insurance policy as a hedge against big financial losses.
Sub-par credit history
In many countries with a well-established credit reporting system,
credit history has some bearing on one’s car insurance premium. With
credit reporting still fairly nascent in the UAE, it is yet to be seen
if insurers will take the driver’s credit report and credit score into
consideration when providing a quote. Customers with poor credit scores
will be hit the hardest – One more reason to work towards maintaining an
unblemished credit report.
Not getting quotes before you buy insurance
If you skip comparing your options before purchasing a car insurance
policy, you’ll miss out on plans that are not only the most suitable for
you but also offer the best value for your money. Settling on the first
car insurance policy you come by also means you won’t be able to take
advantage of deals and discounts available elsewhere.
Therefore, it’s best to generate multiple quotes and compare policy
features across different insurance plans. You may also find that
switching over to another insurer may let you save significantly more.
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