Insurance premiums for automobile insurance vary greatly depending on the product you choose, not to mention the insurance company you subscribe to. If you want to reduce the burden as much as possible, it is important to understand the mechanism and market price and find the insurance and insurance method that suits you. This time, I will explain in detail the average market price of insurance premiums along with the basic knowledge of automobile insurance.
Auto insurance premium market and basic knowledge
Auto insurance means that the insurance company will cover the damage caused by troubles related to the car such as accidents. It is not compulsory to take out automobile insurance when you buy a car, but it is safe to take out in case of unforeseen circumstances. Even if you say automobile insurance in a nutshell, the feature is that insurance premiums and coverage vary greatly depending on the product. The average annual market price for purchasing a car for the first time and getting insurance is around 1155 USD for those under 25 years old and around 673 USD for those in their 30s , although it depends on the conditions for joining . Insurance premiums are also determined by grade and mileage, so long-term insurance may reduce costs.
The cost of joining can be calculated based on the data provided by each insurance company, but complicated calculation may be required depending on how it is issued. In that case, if you visit the insurance company’s site and use the simulation provided, you can calculate the approximate cost just by entering the data according to the items.
What is the point at which automobile insurance premiums are determined?
In general, automobile insurance premiums are determined based on several items. One of the points common to all insurance companies is the purpose of use. How to use a car in daily life, such as private or commuting, varies from person to person? The feature of insurance premiums is that the more days you use each month, the higher the insurance premiums. This purpose of use is obliged to be declared according to the change, and there are many cases where the cost will be cheaper depending on the content of the change.
Mileage is also an important point in determining insurance premiums. The mileage is calculated for the year prior to the contract, so it will not affect your costs the first time you buy a car and get insurance. As with the number of days of use, the longer you drive, the higher the risk of trouble, so the insurance premium is set higher. Some people fake the distance to reduce costs, but false declarations can lead to penalties such as cancellation of contracts and refusal to pay insurance premiums, so you should never do it.
Introducing a guideline for automobile insurance premiums
The annual insurance premium varies greatly depending on the model, mileage, age, etc. of the car, but it can be used as a guide from the average market price. If you are in your 30s and use it infrequently, the standard insurance premium is about 385 USD per year. However, this is the amount when you have already taken out automobile insurance and have renewed or switched to another insurance company without any accidents or violations. If you buy a car for the first time and take out car insurance, the discount price according to the grade will be less, so the market price is slightly higher, around 577 USD. Even under the same conditions, if you get older, it will be several thousand yen higher, considering the risk of accidents.
The cost of insurance premiums based on mileage is roughly divided into three stages. The standard is less than 288 USD for 3,000 km or less, around 385 USD for 10,000 km or less, and 480 USD for 20,000 km or more. A mileage of just over 1km can cost more than 90 USD. Therefore, if you want to keep your insurance premiums low, it is important to pay attention to this point and refrain from using it if you are about to exceed the default number.
Insurance premiums vary depending on the insurance company, but there are no differences in the examination items that determine insurance premiums based on age, mileage, etc. You can also significantly reduce your insurance premiums by determining when to join. If you want to keep your car insurance as cheap as possible, it is important to understand the conditions and join at the best time.
What is risk subdivision type automobile insurance? Nine risks that determine insurance premiums
So what kind of insurance is risk subdivision type automobile insurance?
Auto insurance is based on individual differences such as the type of car, the age of the driver, and the history of past accidents.
In this way, insurance that subdivides and evaluates risk factors and reflects them in insurance premiums is called risk subdivision type automobile insurance.
The risks that can be reflected in insurance premiums are the following nine items stipulated in Article 12, Paragraph 3 of the Insurance Business Law Enforcement Regulations. The risk items adopted by insurance companies differ.
Risk factors used to calculate insurance premiums
- Accident history
- Purpose of use of commercial, private and other automobiles
- Annual mileage and other vehicle usage
- Type of car
- Presence or absence of automobile safety device
- Number of cars owned
Let’s take a quick look at each item.
(1) Age The
insurance premium will be higher for the age group with a high accident rate based on the statistics so far. Overall, insurance premiums are high for people in their 20s, who have little driving history, and low for people in their 30s and 40s, who improve their driving skills. In addition, due to the increase in accidents in recent years, insurance premiums for the elderly are high.
Currently, it is thought that few insurance companies reflect gender in accident risk.
(3) Accident history
Due to the grade (non-fleet grade system), past accident history has a great influence on insurance premiums. The grades are divided into 20 grades according to the risk of accidents, and those who do not pay insurance claims (people who do not pay for a long period of time) have a higher discount rate of insurance premiums and have a history of paying insurance claims due to accidents. The more people you have, the lower the discount rate for insurance premiums.
(4) Purpose of use for commercial, private, and other automobiles
The risk of an accident varies depending on the purpose of use of the vehicle. In determining insurance premiums, the purpose of use is divided into three categories: daily / leisure, commuting / school, and business use.
In the case of Zurich, it is set as follows. Next, I will explain (5) It is a mechanism to subdivide and reflect the risk according to the annual mileage and other vehicle usage conditions.
(5) Annual mileage and other vehicle usage conditions
Specifically, it is the actual mileage. At the time of contract, it may be a forecast from the current usage status, and if it is different from the actual situation, it is necessary to change the contract contents.
The difference in insurance premiums by region (prefecture) is calculated based on the past insurance payment results in that prefecture. In prefectures where there are many accidents and many insurance payments are made, insurance premiums are higher than in other prefectures.
(7) Vehicle type
There will be a difference in insurance premiums based on the type-specific rate class that divides risks according to the vehicle type and model. In the past, the higher the model of car that has paid the insurance money due to an accident, the higher the insurance premium will be.
(8) Existence of automobile safety device
Some insurance companies set a low insurance premium if the contracted vehicle is equipped with the specified safety measure device.
Number of cars owned If multiple car contracts are made by one insurance company, there may be a discount on insurance premiums.