Why is it that two people with the same provider, driving the same car, are the same age and even gender – are unlikely to pay the same insurance premiums?

So what determines our insurance premiums and why would they be different from person to person, even when sharing so many similarities?

MiWay‘s Rory Judd explains that it isn’t that simple – people are all different. Each person works and lives in different areas, some are single, some married and all of these are contributing factors as to the likelihood of your car being stolen. The higher the probability, the more your insurance premiums will be!

The chance of your car being stolen differs greatly from area to area. Where you live and park your car, particularly overnight, has a significant effect on the risk.

If your car is locked away in a garage, with an advanced alarm system, in a gated townhouse complex – it will be much safer than parking on a suburban street with bad lighting. This should be reflected in the amount you pay as insurance premiums.

“And here there’s a bump in the road: while the value of your car depreciates over time, the cost of spare parts goes up. Most insurance claims are for crash damage – and a bumper for an older car can cost as much as one for a new car, certainly more than it did when the car was new!

Which is why insurers are often unwilling to reduce the premium on your car’s insurance even though the car may be worth less – and also why comparatively minor crash damage to an older car may lead to its being written off, simply because the cost of repairs may be more than the car is worth.”

Article credit: http://www.womenonwheels.co.za/tip/different-insurance-premiums/