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Car Insurance Estimate

By: EconomyWatch Date: 8 September 2009

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A car insurance estimate is the key factor in deciding the premium a consumer pays for getting his vehicle insured. A car that is in good condition and is well maintained attracts lesser premium as compared to a car that has done long distances and looks shabby. Looking at the condition of the car, insurance companies calculate the probability of the car breaking down, and based on this estimate, the premium amount is calculated.

Car insurance companies consider various factors in determining the car insurance estimate. The factors include:

The sturdiness and overall health of the vehicle: The first thing that is noticed is the condition of the vehicle. The car may be just a month old, but if there are too many bumps and dents, expect to pay more as premium.
The distance done: The number of miles done by the vehicle is also an indicator of the health of the car’s engine. Large distances mean more probability of breaking down. Hence, the consumer will have to pay higher premiums.
Number of years with the consumer: The time spent under a consumer’s ownership and the car’s condition define the typical driving style as well.
The year of manufacture: The year of manufacture of the vehicle lets the insurance company calculate the age of the vehicle and, therefore, estimate the premium.
Number of owners: If the car has exchanged too many hands (owners), it means that that the engine must have gone through rigorous use. This triggers the car insurance companies to charge more premium.
Purpose of the vehicle: If the vehicle is used for commercial purposes, the premium goes up, since there is a greater amount of risk to the vehicle involved.
History of the vehicle driver: Car insurance companies may also pull up the consumer’s driving history to calculate the risk involved with insuring the vehicle. A bad track record attracts very high premiums.