The Way Your Driving Record Affects Your Car Insurance Premiums

Many cash-strapped South Africans are re-examining their spending to see where to cut back. A popular target for this is their car insurance premiums because it doesn't appear to offer immediate benefits. However, Auto&General would like to be clear that this is a short-sighted and potentially disastrous move. It is safer to keep your car insured but achieve a lower premium. 

If you're wondering what factors determine your insurance premiums and how you can keep them as low as possible, your driving record is a good place to start. Discover how maintaining a good record can lower your car insurance premiums and how switching to Auto & General's car insurance can give you a great head start.

The way car insurance premiums are calculated

Insurers offer customers varying levels of protection for their cars in exchange for a set monthly fee or car insurance premium. When you apply for car insurance, insurers will analyse data to create a risk model grouping for you. This model predicts (with reasonable accuracy) the likelihood of a customer placing a claim. They use this information to offer you a suitable premium. The higher risk you present to insurers, the more you are likely to pay each month.

However, this doesn't mean one accident makes you a high-risk customer for the rest of your driving career. Insurers will review your entire driving history in an ongoing process, and as certain factors change over time, they may raise or decrease your risk levels. Insurers can periodically re-assess your risk profile to maintain an accurate premium. It means that even if you haven't had the best driving record or experience, you can improve it to reduce the likelihood of placing a claim and, by extension, lower your premiums.

What factors determine your insurance premiums?

Risk modelling is a specialised business function undertaken by highly skilled accounting and analytics professionals using complex software. It means that there's no way you can guarantee a specific car insurance premium figure in rands. You can, however, examine certain risk factors for a general idea of what you may pay — and highlight ones to focus on to reduce your risk. Here are a few of these factors: Your demographics — Insurers examine the collective pool of South African drivers to see what category you fall into as a risk predictor. The younger you are, the less driving experience you'll likely have — and the higher your premiums.

You can expect to pay lower premiums if you're older and more experienced. Other demographics include gender. Men are considered higher risk than women, and singles have a higher risk than couples. Your car — The car you drive will impact what you pay for your car insurance premiums. The costlier the car, the more you can expect to pay. How you treat your car also matters.

This means you can expect to pay less if you park it in a locked garage in a secure complex than if you park it on the street directly outside your house. Your behaviour — How you drive and your driving patterns can increase or decrease your premiums. A history of breaking the law can raise your premiums or even render you uninsurable. Security features - If you have been proactive and added special security features, such as an immobiliser or a tracking device, your premiums will likely be lower.

drunk driving[2], illegal car racing, or breaking traffic laws in other serious ways Driving history — This will examine your collective driving history over time. It can also determine whether you honour your car's service and maintenance intervals. Traffic violations — This can include your behaviour in traffic and how many tickets you've earned, as well as if you pay fines in full and on time. Minor driving violations — While you may not break the law, you can still experience minor accidents such as fender benders, dents and scratches or small collisions resulting in minor car damage.

The smart way to improve your driving record

Now that you know what areas you can focus on to improve your driving record, you can work on decreasing your risk and optimising your premium costs. Here are a few easy-to-do tips:

• Become a better driver. Complete an advanced driving course.

• Obey the traffic rules. Adhering to maximum or minimum speed limits (as well as any other law governing how you drive and park) will reduce your chances of getting a traffic ticket.

• Keep your car in good order. This means observing the manufacturers’ recommended service and maintenance intervals and attending to issues as soon as they appear. 

• Never drink and drive, no matter the circumstances.

Apply for a car insurance quote from Auto & General 

It can take time to improve your driving record, but your insurer will recognise and reward your efforts. If you've found that your current insurer isn't doing this, it may be time to look for one that does. Auto & General can offer you a competitive insurance premium, so apply for an online car insurance quote.

[1] Deloitte: Risk modelling & risk angles 

[2] CarMag: How drunk driving can affect your car insurance

Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.