How do insurance companies calculate your car insurance premium?

You may not be aware of this, but there are a number of factors that affect the price of your car insurance in Bahrain, or anywhere in the world in this regard. Not all factors can be controlled. Rather, there is something that you can control to reduce the total insurance premium. Thus, knowing these factors will not only reveal how your premium is calculated, but will also help you reduce the cost of insurance.

Here are some of the primary factors that affect your car insurance premium:

Driver’s age and experience


One of the factors that affect your car insurance premium is your age. If you are someone under the age of 25 and have a driver’s license of less than one year, your premium may be at least 15-20% higher than the average. This calculation is based on a statistical study according to which the frequency of accidents and accidents is higher among people who suffer from lack of driving experience and this falls within this age group.

Record accidents and fines


Drivers who have had accidents or received a number of fines for violating traffic rules will find themselves paying a higher premium. The insurance companies consider all of your past claims while calculating the final bid. The insurance company will charge you a higher premium if you file claims earlier. Also, not submitting insurance claims entitles you to a no-claim bonus that is deducted from the insurance premium.

Lifetime and coverage of the vehicle


Another important factor that determines your car insurance premium is the life span of your vehicle. Because a new car is expensive to replace or repair, it will need more comprehensive insurance coverage to protect it from damage. And the increase in insurance coverage means that you will have to pay more for insurance for the new car. However, older cars can be insured with an additional, more expensive cover.

Features and car type


A luxury car or a high-value vehicle costs in terms of repair or replacement, especially if they contain expensive parts. However, insurance companies reduce the premium if the car is equipped with advanced safety features. As this car is safer to drive, the premium will be lower. At the same time, the cost of insuring cars with large engines is higher compared to others.

Agency or non-agency repair


Repairs are an important point that is calculated while establishing the premium. Your vehicle can be repaired either by your official vehicle dealer (also known as agency repair) or by an agency that is not approved by your insurance provider. The agency repairs option can be included in the insurance cost by paying an additional cost. However, be sure to check if it is really included in the insurance policy or not.

The amount due by the insured


Also known as the deduction amount or the deductible cost, this is the amount that you agree to pay in the event that an accident occurs because of you. You can reduce your monthly installment by agreeing to pay a higher carrying amount or vice versa.

Additional features


You can pay an additional fixed amount for any additional or optional benefits, such as extended geographic coverage, roadside assistance, etc., that you would like to add to your existing policy.





Please enter your comment!
Please enter your name here