Insurance Pricing Factors

You will know that when you try to get a quote for car insurance you will need to provide the insurance provider with a lot of detail including the make and model of the car, where the car is kept overnight, how many people will drive the car, any previous accidents you have been involved in while driving and much more. Insurance companies need all tof this data to calculate your driving risk and the likelihood of you needing to claim on your insurance. The higher the risk of you making a claim, the higher the premium you will be charged. Here you can find more information on how insurance companies calculate insurance quotes and how you can get the cheapest possible insurance policy.

Main Insurance Pricing Factors

Each car insurance provider will consider different factors when pricing their insurance policies. However, the main factors most insurance providers use to price a quote for their customers are as follows:

Every car make and model is banded into an insurance group to help insurers judge their risk factor and price their insurance. This banding is called the Insurance ABI group. The Insurance ABI vehicle group rating of a vehicle is decided and declared by the Group Rating Panel, which is made up of two different boards – the ABI (Association of British Insurers) and LMA (Lloyds Market Association).

Other Insurance Pricing Factors

Other factors that can affect the price of your insurance quote are:

• What the vehicle will be used for – e.g. social, domestic and pleasure or business
• The vehicle’s predicted annual mileage
• The number of drivers able to drive the vehicle
• Whether the vehicle is locked in a garage or parked on a road overnight
• The vehicle’s security features
• The driver’s occupation

The following factors can also affect the price of your insurance:

Marital Status

Some insurance companies also take your marital status into account when giving you a quote. This is because insurers have found single drives to often be more careless compared to more settled married couples. Married couples tend to be more mature with more responsibility including children which means they have more of a reason to drive safely. This is obviously quite a generalisation but it still affects car insurance prices.

Advanced Driver Courses

If you are a newer driver (within the first year of passing) or a nervous driver you can take an advanced driving course to improve your driving skills and bring down the price of your insurance. Even if you are not a new or nervous driver, if you take part in an advanced driving course you may save money on your insurance. Some insurance companies value driving courses so much they will offer you up to a 30% discount on your policy if you have passed a driving course.

Adding Drivers to your policy

It is always helpful to have more named drivers insured on your car as it makes it more convenient to share driving on longer journeys and they can borrow your car. It is also helpful as having more named (experienced, low risk) drivers on your insurance policy can actually bring down the price of your insurance. This is because the more experienced drivers who are insured on your car, the less you will be using it making it less of a risk to insurers. If you are a young driver, it may not help adding other young or inexperienced drivers onto your policy as this may increase your premium. But if your parents have been driving for many years and have accrued many years No Claims Discount, then they are considered highly experienced, low risk drivers and your insurance premium will probably decrease by adding them onto your policy. Therefore, when you get a quote you should experiment with adding named drivers onto your policy and seeing the impact it has on your premium.

Avoid Deception

When taking out a new policy it is vital that you stick to the truth. If, for example, you tell your insurance company that the car is being used for personal use but in reality you are also using it for work, your car will not be covered by your insurance. Insurance providers will find out the truth so there is no point lying to them.

Tips for Keeping Your Car Insurance Quotes Down

You can keep your car insurance quote low if you do the following:

Stay claim free

One of the most important factors insurance companies take into account is how many years no claims bonus you have accrued. The more years you have had car insurance and not made a claim; the cheaper the quote. If you do have an accident or scrape, you could try to settle it privately to protect your no claims discount. However, only do this if you can afford it.

Improve Your Car’s Security

Car security plays a factor in your quote and its something you can improve yourself. A car alarm and immobiliser will get you a small reduction but if you install a tracker you could get a larger reduction.

Have a Higher Voluntary Excess

When applying for an insurance quote you will be asked how much voluntary excess you are willing to pay. If you are willing to pay a higher excess you may see a reduction in your quote but not every insurance company will offer this.

Buy a Smaller Car

The ABI grouping of a vehicle is one of the main factors insurance providers use in insurance pricing. There are 50 groups in the Insurance ABI grouping system and the higher the group rating the more expensive the insurance premium. Sports cars and high risks vehicles tend to have a higher group rating and safer, family friendly cars are lower grouped vehicles. Factors which influence which insurance group a car should belong to are the cost of the vehicles parts, the cost of repairing the vehicle, the price of a new version of the vehicle, the vehicle’s performance and the vehicle’s security. You can find out what group your car is in at Thatcham Research.

Keep Your Driving Licence Clean

A clean driving licence can keep your insurance premiums low. As soon as you get a speeding ticket and 3 points on your licence you are considered a more reckless driver by insurance companies. This means you are a high risk driver and may be charged a higher premium.

Do Not Modify Your Car

If you change anything on your car like the suspension, lights, wheel size, engine and anything that affects its performance you will need to declare it to your insurance provider. Modifications to your vehicle will increase your insurance premiums but if you do not declare changes to your insurance provider then you will not be covered if you have an accident.

Reduce the risk to your insurer

Although there is nothing you can do about your age, gender or where you live there are many other factors that insurance companies will look at to determine the level of risk in insuring you which you can in fact impact to bring your premiums down.

1. Your choice of car

   The bigger the car engine the more powerful it is and the more of a risk it is perceive to be insurance companies especially if you have little to no no claims to show you are a competent and experience driver.

2. Modifications

   Adding alloy wheels and a big sound system will only push your insurance premiums up. The general rule is that the more value you add to your car the more an insurer will have to pay out if it get stolen or becomes involved in an accident.

3. Adding an experienced driver to a young drivers policy

   With premiums for anyone under 25 costing a kings ransom it can sometimes, depending on the insurers, be possible to lower the cost of your insurance simple by adding someone to your policy who has some no claims under their belt such as one of your parents. In the insurance companies eyes this implies that for some of the time your car will be driven by someone with more experience therefore minimising the overall risk of that car being involved in an accident.

4. Where do you keep your car?

   Where you keep your car can make a big difference to an insurer in terms of the likelihood of it being damaged or stolen. Parking your car on the street leaves increases the risk of it being hit by another car or vandalised by passers by as well as it being an easier opportunity to thieves than if you we’re to keep it locked away ion garage.

   It’s often the case however that people have no choice but to park on the street, for example if your live in a terrace house. In this case fitting extra security to your car such as an alarm, immobiliser or tracking device can help reduce your premiums.

5. Your driving

   Avoid driving convictions at all cost! Getting caught speeding or on your mobile will means points on your license which tells an insurer your more of a risk for them to insure which will significantly increase your premiums.

Get your no claims bonus faster

Some insurance companies offer an accelerated no-claims bonus for young drivers, this will allow you to get one years no claims discount after just 10 months instead of waiting the full 12 one company that offers this is Admiral.

The only other way to get the same discount that you would with one years no claims is to do a pass plus driving course, a lot of companies give you the same amount of discount with the pass plus as you would have got with one years no claims.

If you commit an offence while you are driving on the road you will be charged with a driving offence. Most of the time points will be added to your licence and you will receive a fine. For each driving offence there is a code called a conviction code or offence code. This code will relate to your offence and dictate how many points you get on your license.

Driving Offences

A driving offence is any illegal activity highlighted in the Highway Code.

Committing a Driving Offence

If the police see you committing a driving offence then they will stop you and charge you. You will then have to provide them with your driving licence. If you do not have it on you then you will be given a few days to deliver it to a police station.

Driving offences can also be captured on camera. If a camera records you committing and offence, your details along with the camera evidence will automatically be sent to the DVLA. The DVLA will then send you your charge in the post which will provide information on the offence and the conviction code.

Any driving offence comes with a conviction code whether you are stopped by the police or whether you are caught on camera. The conviction code, along with the points incurred, will then be added to your paper licence.

Driving Offence Fines

When the conviction code and points are applied to your licence you will also receive a fine which you must pay or risk being taken to court. The price of the fine varies for each conviction code. Usually the fine costs about £60 or more.

Having your Licence Revoked

If you exceed the set points on your licence then you will have your licence revoked and you must wait 56 days before you can apply for a renewal licence. Drivers that have had their full licence 2 or more years can have a total of 12 points before their licence gets revoked. Drivers who have had their full licence less than two years can only have a total of 6 points before their licence may get revoked.

If you have exceeded or reached your points limit then you will receive a TT99 which signifies a disqualification under the ‘totting-up’ procedure. The driver is liable to be disqualified from driving and the TT99 offence will stay on the licence for four years, regardless of the time the driver is banned for. This may impact the price of insurance for the four years the TT99 is featured on the licence.

Conviction Codes and Points

Different codes will involve different points, different fines and different penalties. For example, a drink driving offense can result in an instant ban and points can stay on your licence for up to eleven years.

Driving Ban

Attempting to drive whilst banned can lead to further points, further fines and possibly a prison sentence for driving or attempting to drive whilst disqualified by order of a court.

Conviction Codes and Your Insurance

All points must be declared to your insurance company. Different insurance companies deal with points and penalties in different ways. Some insurance providers will increase the premium you have to pay. Most providers will apply a compulsory excess to the driver whilst their driving their vehicle. This means that if the driver were to have an accident in the insured vehicle then they would have to pay more towards the claim. Points make drivers a larger road risk in the eyes of insurance companies which is why they may charge an additional excess or premium.

If points are not declared to the insurance company it may well invalidate any insurance. This means that if you are involved in an accident, your insurer will not pay for the damage and it will be up to you to finance the repairs.

Having some conviction codes on your licence may result in it becoming difficult for you to buy any insurance. Drink driving offences or insurance offences are generally considered more serious than other offences within the insurance industry. However, some insurance companies will accept the business but may load it significantly due to the amount of risk they are taking on insuring a “high risk” driver.

Common Conviction Codes

As mentioned above, if you get caught committing an offence while driving, an offence code or conviction code will be put on your licence. When a conviction code is put on your licence you will also receive points on your licence which may affect your insurance or lead to you being banned from driving. Remember, you are only permitted to drive if you have less than 12 points on your licence.

Here is a list of some of the more common conviction codes that are added to drivers’ licences.

Speeding Conviction Codes

One of the most common driving offences is speeding. With permanent speed cameras, average speed cameras, mobile speed checks and under cover police cars; the chance of being caught speeding are high. The following conviction codes apply to speeding offences:

If you exceed the speed limit by a lot you may be charged with ‘dangerous driving’ rather than speeding. Under a dangerous driving charge you may be taken to court and you risk being banned from driving.

Insurance Conviction Codes

By law, you must have some level of insurance on the vehicle you are driving, even if you only use the car for short journeys. You never know when an accident may happen and you need to make sure you are financially covered. If you cannot afford insurance you really cannot afford to drive as it is a legal requirement and you will incur a heavy fine and possibly the destruction of your vehicle if you fail to have insurance. The conviction code for driving with no licence is as follows:

Remember, from the moment you are caught driving without insurance, you will not be permitted to drive your vehicle again until you have valid insurance for the vehicle. Therefore, the police may remove your vehicle from you and return it when they are happy you have insurance.

Motorway Conviction Codes

Driving on the motorway is a different experience to driving normal roads. Failure to comply by these rules will result in a conviction code being added to your licence. Read motorway safety to find out the rules for driving on the motorway. The conviction code is as follows:

This conviction code does not apply to motorway speeding offences. If you are caught speeding on the motorway the conviction code SP50 applies, as mentioned above.

Traffic Direction and Sign Conviction Codes

Other common driving offences include not complying to the signal or direction of traffic. This section includes driving through a red light or not stopping where you are supposed to. The following conviction codes come into this category:

Although you may not see any police around and think you can get away with these offences, remember some police work under cover in unmarked police cars. The general public can also report your number plate to the police if they see you committing a driving offence. There are also cameras at some traffic lights which can record you breaking the regulations and going through a red light.

Drink Driving Conviction Codes

Unfortunately drink driving offences are still a major issue in the UK and a common offence. There are too many drivers who are caught drink driving even though there is more education on the effects of drink driving. Remember, you may still have alcohol in your system from the night before if you are driving early in the morning, and you could still be over the limit.

The legal limit of alcohol you are allowed in your system when you drive is 35 microgrammes of alcohol per 100 millilitres of breath. This is usually a small glass of wine, half a pint of beer or one single shot. However, it is not as clear cut as that. The amount of microgrammes of alcohol that can be found on your breath all depends how quickly your body metabolizes alcohol, your weight, your age and what you have eaten. Therefore, to make sure you are not over the limit you should avoid all alcohol if you plan on driving.

The conviction codes for drink driving are as follows:

Penalties for drink driving are high because of the increased risks of an accident when you drink drive. If you get charged for a drink driving offence you will be taken to court and you risk a large fine, a ban from driving or even imprisonment. Remember, even if you drive slowly your reaction time when you drink is dramatically reduced, you will have trouble judging speed and you will not be as alert as if you were sober.

Construction and Use Offence Codes

Some driving offences may seem minor but they are in place to keep you and other drivers on the road safe. You may not be aware that some of these are driving offences:

Although some of these seem like innocent offences, they are offences because they either put yourself or other drivers at risk. Always drive safely and try and avoid any distractions. Also make sure your vehicle and vehicle parts are road worthy before venturing onto the roads.

Other Driving Offence Conviction Codes

These are other driving offence conviction codes which have not been mentioned:

To find out more about other driving offences conviction codes visit direct.gov.uk.