How We Calculate Your Car Insurance Premium
When you purchase your Car Insurance from Allianz your premium comprises a number of elements which together add up to your total premium. Your premium is a mixture of external factors and personal factors.
As is well publicised, the external factors are currently very volatile. Insurance premiums have been rising sharply in the previous 18 months. The factors contributing to these rises include:
- Many years of under-pricing in the Republic of Ireland causing many motor insurers continuing to report losses on their motor insurance business
- A greater numbers of road users which in turn has led to increases in the number of claims
- The introduction of Solvency II, a new technical EU directive, which means insurance companies are required to hold greater amounts of capital to cover their claims.
The result, insurance companies have had to adjust their pricing to meet these requirements.
In personal terms, broadly speaking, the individual parts that make up your premium include: a basic cover premium element, discounted by No Claims Bonus (if applicable) followed by a range of optional covers available at an additional premium.
What's The Law?
Any person driving or using a car is legally obliged to have a Motor Insurance policy which will compensate Third Parties for Personal Injury or damage to their property arising from the driving or use of their car.
Types of Insurance
There are 3 types of motor insurance:
- Third Party
- Third Party Fire & Theft
At Allianz Ireland, we offer Third Party, Fire & Theft and Comprehensive cover options. Third Party Fire and Theft offers a lower level of cover with Comprehensive cover offering a higher and slightly more expensive cover.
As highlighted above, your premium is made up of a number of parts; so what drives the basic cover premium element and what exactly do the optional covers provide protection for?
Let’s take each in turn:
The Basic Cover Premium Element
The Basic cover Premium element brings together all your individual details and those of your vehicle. These details will make up your base premium and, include:
- Your vehicle
- Your age or the age of the proposer
- Your license type and those of any named drivers
- Your claims experience
- Your occupation
- Where you live
- What you will use the vehicle for (social, domestic and pleasure or business)
- and so on.
No Claims Bonus
It is at this point we will review your no claims bonus and discount your base premium according to your level of no claims bonus. Read more about No Claims Bonus.
Optional Additional Features
So now you have the base and core protection elements sorted you’re nearly there. However you can go beyond that point and add some additional valuable features which provide further protection, if you wish, at an additional cost. Typically these will include*:
- Protecting your no claims bonus in the event of claims. Effectively allowing more claims in a pre-agreed timeframe without loss of no claims bonus and limits the impact an accident can have on your no claims bonus. Available only with Comprehensive cover
- Driving Other Cars allows the policyholder to drive someone else’s car secure in the knowledge that your policy will cover you for any Third Party risks that may arise
- Windscreen cover protects against accidental damage to your windscreen
- Breakdown Assistance will provide emergency roadside assistance in the event of your car breaking down. The cover also assists with journey continuity and vehicle recovery
- Personal Effects Cover is there to cover against losses of your personal effects from theft or accident while in the car. Personal effects include clothing jewellery, bags and even sports equipment. Please note: Personal effects must be secured in a locked glovebox or boot.
- Personal Accident Cover is a benefits policy that can provide compensation for death or serious injury suffered by the driver as a result of a motor accident they are responsible for.
Of course, every policy has terms and conditions and an Allianz policy is no different. So whilst we have attempted to bring you on a whistle stop tour of how your policy premium is calculated and some of the additional features you can purchase, reading your policy document and any supporting documents to understand the extent of cover described above is of the utmost importance.
Please note: For full details of car insurance Features, benefits, exclusions and limitations please see our policy information page.
Acceptance criteria, terms and conditions apply.
*Optional Additional Features available at an additional premium. Changes to your policy before renewal may incur a mid-term adjustment fee.
Date:September 29th, 2016