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What Causes Car Insurance Rates to Increase?

Sunday, February 16, 2020

Car insurance quotes and premiums are calculated using value and risk. The higher the value of the vehicle, and the riskier the driver is to crash or damage it, the more the car insurance policy will cost.

It’s like betting on whether your friend will roll a strike at the next bowling night. You will take everything into consideration to calculate whether they will hit a strike and if the bet is worth taking. Car insurance policies work the same way, it’s about the factors that may influence the possibility of future claims.

Here are some of the factors that will cause your car insurance rate to increase, and how to maybe decrease it.


How You Drive


Have a history of bad driving? Maybe a few outstanding traffic and speeding fines? If you have a history of negligent driving, you might end up paying more in car insurance rates. Before you apply for car insurance, make sure you settle any outstanding traffic fines or penalties to your name.


When You Drive


Even though you might drive the same car, not all drives are equal. When, where and how often you drive can also increase your car insurance rate. If you drive 4km a day during off-peak times throughout daylight, you are far less at risk that someone who drives over 50km a day at peak rush hour through dangerous neighborhoods.

These are determined using various statistics agencies and sources, such as StatsSA. Their annual road accident and crime reports are a good indication of where higher risk regions are, according to their data.


If You Crash


Got in a car accident? Although claims process, such as our express claims service, make claims from your car insurance a breeze, it will be factored into ongoing and future car insurance quotes.

Much like the previous traffic offenses you might have, a previous “at-fault’’ incident is an indication of your driving risk, something which car insurance agencies will take into consideration. And before you think you can keep your driving record a secret, previous claims will always be on record and car insurance agencies are able to request it from your previous car insurance companies. 


Where You Park


Is your car parked in a locked garage with security and located in a “safe’’ neighborhood? Then great. If you park on the side of the street without any security in a neighborhood known for its high crime rate, then expect to pay more.

Your office is also an important consideration as its parking lot can cost you more in car insurance. If your office has a parking space in a secure, preferably covered or underground parking bay, then ask if you can park there to avoid paying more in car insurance costs.


Getting Older


‘’Wait, doesn’t car insurance get better if you are older?’’ Well, yes and no. There is a range in the timeline where age is great for car insurance, and then there is a range where it isn’t. If you are a young driver (usually under 25) then you will be considered higher risk than other, more mature drivers.

However, if you are in the later years of your retirement (usually over 70) then you are once again considered high risk on the roads or at least higher than the other adults. So, the timespan for ideal car insurance coverage rates is between 25 – 70 where you will pay the least on your car insurance premium.

If you want to talk more about what causes your car insurance rates to increase, call us on 0861 007 367 or connect with us online and we’ll be happy to talk it over.


Dialdirect is an authorised FSP and insurer. Ts and Cs online.