The most important factors that affect the value of the vehicle insurance premium

Some may ask why there is no fixed value for the car insurance premium? The answer is simply that there are several criteria that help insurance companies assess the risks that the insured and his car may be exposed to, so that they can determine the total cost of the insurance policy. In general, these criteria may include the following:

  1. Factors related to the insured and the driver: such as age, occupation, type of driving license, number of years of possession of a Saudi driving license, national address, number of claims, number of accidents, traffic violations, and others.
  2. Factors related to the quality of the insurance policy: There are two types of motor insurance policies; They are comprehensive insurance, and compulsory insurance.
  3. Vehicle related factors: such as the manufacturer, model, year of manufacture, prices of spare parts, insurance value, and others.
  4. Additional benefits: These are the additional extensions that the insured wishes to participate in.

The most important factors that contribute to reducing the value of the vehicle insurance premium

There are several factors that contribute to reducing the total cost of vehicle insurance, so we will explain the most important of those factors and how to benefit from them.

  1. Traffic record of the driver Reviewing the driver’s accident record to assess the amount of traffic accidents he caused and his compliance with traffic rules and regulations is one of the basic criteria that insurance companies follow to determine the value of an insurance policy. Thus, the more accident-free the traffic record, the lower the cost of car insurance. In the same context, the Saudi Central Bank obligated licensed insurance companies to grant a discount of up to 15% to owners of a claim-free record for one year without claims when obtaining mandatory vehicle insurance policies, and the percentage increases with the increase in the number of years of the record without claims to reach 30% for three years without claims. has also allowed Saudi Central Bank insurance companies to offer this discount on comprehensive motor insurance for individuals.
  2. Driver’s age and experience Car insurance for drivers under the age of 25 may be more expensive than other age groups, as there is a greater chance of them causing traffic accidents. While the insurance cost may be lower for the older age groups because they are more responsible while driving. Additionally, the driver’s driving experience affects the cost of insurance; People who have recently obtained a driver’s license are more expensive to insure their car than those who have more years of experience, even if they are of the same age group.
  3. Vehicle value The greater the value of the vehicle, the higher the price of the comprehensive insurance policy. Insurance on luxury cars is more expensive than regular cars, because the slightest scratch may cost insurance companies a large amount of money. There are some other factors that determine the value of a car; Including: the manufacturer, the car model, the market value, the year of manufacture, the cost of repairing the car, and the prices of spare parts. Premiums for cars that are safer and less likely to harm or injure occupants are also reduced.
  4. insurance coverage There are two types of insurance coverage. The first is compulsory insurance, which is based on protecting the financial responsibility of the insured against damages incurred by others, in addition to the expenses related to it, under the insurance policy, whether arising from the use of the vehicle or its stopping within the Kingdom. The second is comprehensive insurance, which aims to cover damage to the insured car, third party property and related expenses as a result of a traffic accident, and the insured car was the cause of that. Comprehensive insurance is more expensive than compulsory insurance because of its additional benefits. Also, the value of this insurance may increase or decrease depending on the amount or percentage of the deductible (ie the cost borne by the insured when an accident occurs). The higher the deductible, the lower the value of the policy and vice versa.
  5. Additional benefits or expansions In the event of choosing comprehensive insurance, the insured can choose to add some benefits or expansions to the insurance policy in return for paying an additional subscription in accordance with the terms of the policy. These advantages include, for example; Expansion of the geographical area, which provides extended insurance coverage outside the geographical scope of the Kingdom, or the expansion of personal accidents.

We see that the vehicle insurance premium is subject to many considerations, and if the insured person becomes familiar with it, he will be able to choose the insurance policy that suits his needs. Also, maintaining a traffic record free of accidents and violations, in addition to subscribing to the additional benefits that he needs only, will help him save money and reduce costs.

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