Dangerous Drivers will face Higher Insurance Premiums
People who have been involved in accidents with red cards accumulated from the police authorities by way of penalty points may find the going tough for them as they will be categorized as high-risk drivers. They will face high insurance premiums. Even young drivers without much driving experience are likely to pay higher premiums. The traffic statistics suggest that this driver segment may be more accident prone.
Dangerous drivers will be paying more in insurance premiums in the future besides being penalized by the usual fines. The premiums are based on the standard car models and the depreciated value of the vehicle. The standard cost of insuring a car can vary between five to eight per cent of the car’s value. Premiums are worked out on the basis of several factors to make sure that they reflect the individual risk situation correctly. How much a car owner will pay probably depends on the credit record that he or she has. It is also going to depend on where he or she parks the car overnight and whether the car is liable to be vandalized or be prone to thievery.
The insurance market in the western countries is a little more advanced than the eastern countries in its premium structure. In the United States of America, the rating is based on the car owner’s individual profile and the car make or its model is not the only influencing factor in working out the insurance premium on a comprehensive basis.
In the last few years, few insurance companies have begun to look into an advanced approach by taking into account extraneous actuarial risk factors that can have an impact on costs and those include the claims experience and the history of the car and its owner.
Many multi-national insurance companies have made alterations in the premium rating structure and as the years go by, the premiums are going to be based less on the type and value of the car. There is another aspect to the consensus that safe drivers should not be penalized with high premiums to compensate for the negligent ones so that the drivers will be motivated to develop safer driving habits.
The actual premium is going to depend on the car owner’s history of driving and it will also consider no claims discounts and the profile of the vehicle. The pricing model of the insurers is also going to take into account the country where the initial driving licence was obtained in. Options will be offered for agency repairs, off-road coverage and new replacements. There is a general feeling that average priced cars are much affordable to insure than the fancier luxury cars.
The minimum insurance cover required by law is the third party liability with coverage or damage to others’ vehicle or towards bodily injury treatment or death of the aggrieved party. However, the third party liability will not allow people to avail of crucial benefits like a personal accident policy on self or damage repairs to your car. The policy will not cover the driver or the occupants of the car. At the time of renewing the insurance policy, a good way to get a discount is to prove that you follow safe driving rules and that there have been no claims in the previous years.