How does the auto insurance premium work?

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The auto insurance premium refers to the amount that an insured pays to an insurance company in order to be covered by warranties. It is often signed for 12 months and reassessed each year according to the criteria set in the auto insurance contract.

It is paid monthly. But an insured can very well choose to pay quarterly or annually. An annual payment is also less expensive than a monthly payment.

How to calculate the car insurance premium?

Several factors come into play.

– The level of guarantee

The amount of the insurance premium partly depends on the degree of coverage desired by the insured. The higher these guarantees, the more he will pay.

The mandatory minimum guarantee (third-party insurance, also called civil liability) is the cheapest guarantee. But bodily injury or material damage suffered by the driver responsible for an accident will not be covered by his insurance.

To avoid such a scenario, the insured can take out additional guarantees for his car insurance, for example a guarantee against theft and fire.

If the insured takes out all-risk insurance, he will be fully compensated by his online car insurance in the event of a claim (whether or not he is responsible for it). This guarantee is logically more expensive. However, there are cases where this guarantee will not work, for example in the event of drunk driving.

Insurance companies also offer guarantees per kilometer based on the kilometers traveled. Its cost is lower. It is ideal for drivers who drive little.

– The driver

Depending on the driver’s profile, the insurer assesses the degree of risk to insure.

For this, he will take into account his age and seniority of license. Young drivers, who therefore do not have much experience, will have to pay a premium. It will be the same for a 40-year-old driver who has never been insured, despite his 20-year license.

– The use of the vehicle

The type of parking is essential in the eyes of the insurer. If a car is parked in a secure garage or parking lot, the insurance price will drop. On the contrary, if the car remains on the street, the insurance premium will increase.

Insurers check where the insured lives. If, for example, he lives in a large urban area (therefore with more vehicles and more risk of accidents), the premium will be more expensive than if he lives in a rural area.

Is it a vehicle for exclusive use or shared with another driver? In the second case, there will often be an additional premium to pay. Nevertheless, the main driver wins. First, because he has no declaration to send to his insurance when he lends his vehicle to the 2nd driver. Then, because the 2 drivers are covered by absolutely identical guarantees. Remember, however, to declare the use corresponding to the 2 conductors. Also note that by doing this, some insurers may assign the principal driver bonus to these other drivers.

Only the main driver pays the insurance premium.

– Driver background

The insurer asks the insured for his statement of information. This document lists the bonus-malus of the insured as well as the number of responsible accidents he has caused in the past.

– The vehicle

The characteristics of the vehicle to be insured vary the amount of the auto insurance premium (year of 1st registration, make, model, engine power, purchase price and Argus rating).

Concretely, a new vehicle costs more to insure than an old vehicle, because in the event of a claim, the cost of repairs will be more expensive. A new vehicle also attracts more covetousness and will therefore be more likely to be stolen according to insurers.

– Change of situation

Certain changes in the insured’s situation cause the amount of the insurance premium to vary. For example if he moves, changes profession or converts his vehicle.

The insured must declare these changes of situation to the insurer under penalty of incurring a termination of contract.

The bonus-malus varies the amount of the insurance premium. In the event of good conduct, this multiplier coefficient will lower the amount of the premium. If, on the other hand, the insured is responsible for one or more claims, the price to be paid will increase from one year to the next.

– Bonus Malus

The bonus-malus varies the amount of the insurance premium. In the event of good conduct, this multiplier coefficient will lower the amount of the premium. If, on the other hand, the insured is responsible for one or more claims, the price to be paid will increase from one year to the next.

to summarize

What is the auto insurance premium? How is it defined? Let’s find out what are the different parameters influencing its amount, including the vehicle, the driver’s history or the level of guarantee.

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