How does your lifestyle affect your pocket?

Does the way you live make a difference to the cost of running your car? Are you a hard living, urban risk taker or a safe-playing country dweller? Read on…

An insurer will insure you according to how much ‘risk’ you present to them. Most people are aware of the factors that influence their car insurance premiums such as the type of vehicle and the age of the driver. But you may not be aware that your job, your street, your marital status and even your smoking habits can also affect your premium.

So what do insurers take into account when they assess your ‘risk profile’ to determine how much you should pay for your car insurance?

Profession – Your job makes a difference to your premium. Insurers consider some professions to be more risky, basing their presumptions on claims statistics. Journalists, salespeople, restaurateurs and high-profile individuals are considered as high risk (perceived fast living, high personal liability) whereas teachers and those with more sedentary office jobs are lower risk.

Marital Status - Traditionally, married people make fewer claims so they are considered by insurers to be less risky because of perceived lifestyle ‘stability’. They are also more likely to have children as passengers in the car and therefore are perceived to be more careful drivers.

Smoking – Non-smokers sometimes benefit from reduced car insurance premiums. Some insurers view smokers as a higher risk because they are likely to be distracted on the road by lighting up and therefore more prone to accidents.

Gender – Women generally get cheaper premiums. Statistically they are better drivers than men. Couples who use the car equally should consider insuring vehicles under the woman’s name. If the main policy holder is male, he could lower his premiums by adding a woman as a named driver. Most insurers require the main policy holder to be the main driver, but not all.

Age – Statistically, older drivers are less likely to make a claim. Over 50s often benefit from discounted premiums. Car insurance premiums for young drivers are usually very high.

Security – Premiums fall if your car is locked away and not exposed. Safety and security features such as alarms, immobilisers, steering locks and tracking devices will reduce your premium. Use secure parking such as a garage or off street parking if you can.

No Claims Bonus – Safe, sensible drivers who have built up their ‘no claim’ years will be offered lower premiums.

Voluntary Policy Excess – Opting to pay a higher voluntary excess (the amount the insurer will pay towards costs in the event of an accident) will decrease premiums.

Annual Mileage – Some insurers will offer a discount if you have low annual mileage. This can cut up to 15% off your premium.

Named Drivers – For younger drivers, if you add an older, more experienced driver to your policy, your premium could come down.

Vehicle Type – Insurance companies classify cars into groups to provide the correct level of insurance. The groups range from group 1 (the lowest cost) to group 20 (the highest). If you drive a high performance or sports car, the increased power poses a greater risk, has a higher group rating and thus a higher insurance premium.

Modifications – Modifying your car will affect your premium. Manufacturers work closely with insurers so that a particular model of car can be insured to a standard. If you modify the car then the factors on which your premium has been based will have changed and the number of insurers that will insure you is cut dramatically.

Driving Habits – Using your car to commute to work will make your premium more expensive because you have more annual mileage and are more likely to be travelling at peak times. If you are only using your car for social and domestic use, tell your insurer.

Advanced Motoring Qualifications - If you have completed the Pass Plus or Advanced Institute of Motoring course insurers may cut your premiums by up to one third.

Location – If you live in a city your premiums are likely to be higher than if you live in a more rural location. Some cities or parts of cities are considered more prone to criminal attacks than others.

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