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Factors that Affect Car Insurance Rates When Shopping for the Best Cover

While mostly everyone knows that the type of car insurance cover you carry will affect the price you pay, many people don’t realise that insurance actuaries determine rates based on the amount of risk an insurance company needs to carry. Insurance is all about risk and since most people simply don’t have the money to pay what could amount to catastrophic losses, they are legally bound to buy insurance. So then, what are the factors that can significantly affect how much you will pay for that car insurance that, at times, can be quite expensive?

First a Quick Look at the Type of Cover

Before getting into the four broad categories an insurance company looks at when quoting you a price, it’s wise to know that the kind of cover you buy will also impact what you pay. For example, if you buy collision for your Nissan Brisbane policy, you will pay more than if you didn’t add collision to the policy. It would be a pretty foolish thing not to do considering the cost of a new car, but if you aren’t worried about what it would cost to buy a new Nissan, that’s up to you – with one exception. If your new Nissan is financed, then the lender and the seller will require you to protect their investment. Collision and other ‘types’ of insurance will affect the end cost to you.

Why Postcodes Factor into the Cost of Insurance

This is perhaps the most misunderstood factor in the cost of insurance. Your postcode matters simply because there are some areas where more accidents happen. It really doesn’t matter at this point why there are more accidents in any given postcode but that is a definite factor when determining cost.

Listed Drivers on the Policy

Most people understand why listed drivers affect the cost of insurance. A driver who has little experience and is considered to be a new driver or a learner driver will obviously pay more for insurance cover than someone in their early to mid-forties with a couple decades of road experience under their belt. This is what the kids would call a ‘no brainer.’ This is also why some parents buy used cars for their kids and cover them under their own policy.

Cost and Type of the Vehicle

Actually, the cost of the vehicle only really factors in if the vehicle itself is going to be covered. With basic liability the cost of the car doesn’t matter but again, if you are financing the car you will need to carry collision because the lender is going to demand you protect their investment. However, the type of vehicle matters on all types of insurance because some types of cars are less roadworthy than others and have a longer history of getting in crashes. Some sporty cars will be super expensive to insure.


Here is another factor that some people aren’t clear on but mileage does factor into cost simply because the less you drive the lower your chances are to get onto an accident. That’s another easy one to understand.

If you are looking for cheap insurance the best thing to do is a bit of price comparing online. However, in case you don’t understand how insurance is priced, the above information should give you the basics. There is always a way to find a cheaper policy, but is it in your best interest to do so? You decide!

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