Car Insurance CalculatorMarch 21, 2023
Car insurance is not a random, one-time purchase. It has repercussions - if not purchased properly. You need car insurance not just because it’s a legal mandate but also because you want to shield yourself from any heavy expenses that may come your way because of on-road contingencies.
Enter two important concepts - the cover amount and the premium. You should always make sure that the cover amount you choose is wide enough to accommodate any potential expenses (no matter how big) and at the same time, you should also be aware of the premiums you will need to pay. Different insurance companies may offer you the same coverage at different prices, and hence, making a comparison before buying a policy will help you pick the most affordable policy out of the lot.
How do you make the comparison and all these calculations then? You can sit down for hours in front of the insurers’ websites and excel sheets, or you can use a pretty nifty tool - a car insurance calculator. It helps you make a well-informed decision in just a few clicks!
Let’s discuss car insurance calculators in more detail.
What is a Car Insurance Calculator?
A car insurance calculator is an online tool that helps you to calculate the premium amount for your car insurance and avail of the best-priced policy. It also helps you to understand various factors that impact the premium of your car insurance. All you have to do is enter a few details about your car, such as the model, the registration number, etc, and you will get the premium details.
Benefits of Car Insurance Calculator
A car insurance calculator is a very helpful tool. Here are some benefits of using a car insurance calculator -
1. It saves you time
A car insurance calculator saves you a lot of time as you don’t have to do the calculations manually. All you have to do is fill in the required details and the tool will carry out the calculations in a few minutes.
2. It is a convenient tool
The best part of using this calculator is its convenience. Since this tool is available online, anyone can access it from any part of the globe.
3. It is a hassle-free tool
A car insurance calculator makes the insurance purchase process simple and reliable. You just need to follow some simple steps.
How Does a Car Insurance Calculator Work?
A car insurance calculator is very easy to use. You need to follow a few simple steps to get the premium details -
1. Firstly, visit the website of the insurance company or a broker of your choice and enter the details like make and model of your car, registration year of your car, your location (Emirate you drive your car in or reside in), your driving experience, claim details, etc.
2. After you enter all these details, you will be directed to the quotes page. If you visit a broker's page, you will see multiple quotes from various insurers.
3. Then, check the coverage they provide and then choose the desired insurance company of your choice.
4. Some insurers offer a few add-ons as an in-built feature while some may charge extra for it. Add-ons aim to provide you with an extra layer of protection. Always check the add-ons provided by every insurer and choose the insurer that offers you the maximum coverage at a premium that suits your budget.
5. Lastly, finalize the coverage that you want and make the payment.
What Factors Affect Your Premium?
We’ve already seen how a car insurance calculator works. Now, let’s understand how the premiums work and what factors they are influenced by -
1️. Cost of Your Car
The value of your car affects the premium of your car. For instance, a lower-end car model with limited features will be cheaper as compared to an expensive car with top-notch spare parts.
👉 If your car value is more than AED 300,000 it comes under the bracket of a 2.75% premium rate.
👉 If your car is between the range of AED 100,000 to AED 300,000 it comes under the bracket of a 3% premium rate.
👉 If your car’s value is less than AED 100,000, your premium payment rate will be 3.5%.
2️. Type of Coverage
Your premium will depend on the type of coverage you choose.
👉 If you choose a comprehensive car insurance policy, the premiums will be higher because it offers holistic coverage. It covers you, your vehicle, as well as third parties and properties.
👉 If you choose third-party liability insurance, your premiums will be lower because it only covers the third party and their property.
3️. Driver’s Age
Age is an important factor that determines the premium for your car insurance. If your age is less than 25 years, you might be charged higher premiums because studies show that younger people drive carelessly and get into more accidents. This makes your profile risky for the insurer to cover.
4️. Deductibles or Excess
The deductible or excess amount is the amount that you will have to pay at the time of claim before the insurance company steps in to pay the rest of the amount. The higher the deductible, the lower the premium - because you agree to participate in paying a part of the costs. However, keep in mind that this can lead to larger out-of-pocket expenses, so you need to figure out a balance between the premiums and deductibles you need to pay.
5️. Type and Features of the Car
The make and model of your car as well as its features affects the premiums. For instance, if you have a high-end car with numerous features, its premium will be higher than other standard cars as the spare parts of high-end cars are expensive and their maintenance cost is higher.
6️. Driving History
Your driving history plays a crucial role in determining the premium. If you have a poor history of driving and multiple records of violating traffic rules along with a greater number of claims, your premium might be higher. In such a case, you come under the high-risk category and so, the premium charged will be higher than people who have a good driving record.
Discounts given by insurance providers also play a crucial role in determining your car insurance premium. For instance, if you haven’t made any claim in the past, the insurance company will provide you with a no-claim bonus discount that will reduce the premium of your car insurance.
Having a car insurance policy is a must for all car owners. You can use the car insurance calculator to choose a plan that best fits your needs and your budget. We hope this article helped you understand how the calculator works and the various factors that influence the premiums you pay.