Factors affecting the price of Auto Insurance

Many times it is not clear what determines the cost of the vehicle policy and it is strange that a company charges more for the same insurance. Understand that insurance companies have to estimate the risk involved in auto insurance according to certain characteristics.

There are many myths that arise around vehicle protection, such as that car insurance for an old car is cheaper or that the color of the car influences the price of insurance, but this is not real.

It should be taken into account that the profile of the driver directly affects the price of the policy, as well as the type of vehicle to be insured and the coverage that is contracted. Below are the main factors that insurers take into account to offer auto insurance, according to their own terms and conditions.

Vehicle data sheet

Brand and model

There are brands in the market that manufacture more equipped cars, with greater security systems and import parts, so repairing a car of this type is more expensive. However, there are also car models that are affordable and can have a costly insurance because they are part of the statistics of the most stolen, such as Nissan Tsuru and Versa whose compensation is more expensive.

The proportion of these cars also goes in relation to the number of units that are sold and are in circulation. A clear example is the Tsuru model that was one of the best sellers until 2017 and therefore was more prone to theft. In addition to the security systems of the same were very basic, so to force the lock and start the engine was very easy for lovers of the foreign.

Antique of the car

You might think that a car with more than 10 years old is cheaper to insure. However, it depends on the cost of the repair and the ease of finding the parts, but if it is a discontinued model, the coverage could be more expensive.

Type of use

The activities for which the vehicle is intended influence the calculation of the premium, since the time the vehicle is used, the distance it travels as well as the type of load the car has depends on them. These are aspects that can make the premium cheaper or cheaper.

For example, a private driver’s car such as Uber, Cabify or similar, is more likely to suffer a road accident, since it spends more than 8 hours in circulation, sometimes in dangerous areas and long distances.
It is also to consider that if a vehicle such as a pick-up truck is used to transport heavy materials, this increases the risk of mechanical failure and collision. Therefore, the price of insurance could be expensive.

Profile of the habitual driver

Age of the insured

According to data from the National Institute of Statistics and Geography (INEGI), “Road traffic accidents in urban and suburban areas”, on average the age group between 18 and 30  suffer more mishaps road , showing an average of 9 thousand 350 accidents for the year 2016. While in the next age group the risk decreases by almost 2 thousand accidents.

Based on these statistics, most insurers calculate the premium depending on the range of years of the regular driver or if an additional driver considered high risk drives the car you want to insure.

Therefore, a policy for a mature and experienced driver at the wheel will have a point in favor to obtain an economic price.

Marital status and gender

It has also been estimated in a ratio of 7 to 1, according to INEGI, that men are the ones who suffer most serious accidents when driving.

It is also to consider that being married is one of the protective factors when it is in circulation. Since, a person who has a commitment to a loved one such as a spouse or children who depend on him or her, will handle with more caution than an individual who does not.

Residency and transit area

The Mexican Association of Insurance Institutions, every year makes a report of the states with the highest incidence of violent robbery to insured vehicles. That is why insurance companies take into account the zip code of the person who wants to hire a policy, as there are areas where the chances of vandalism are high.

Similarly, it is estimated that if you drive through urban or high traffic areas, the chances of suffering a road accident are greater. So in cities or small towns, auto insurance is usually cheaper.

However, if the area where you reside is prone to natural disasters such as hurricanes, earthquakes, landslides or floods, the price of automotive coverage could also skyrocket.

The insurance company

The price of the coverage can also be determined by the insurer depending on the quality of its services as well as its internal accident statistics. In general, actuaries who work for insurance institutions conduct studies to find out which vehicles have the highest road accidents and those that steal the most, with this they can estimate the cost of the vehicle policy by model and by year.