Car Insurance Premiums
There are a number of factors that are taken into account when calculating a motor vehicle insurance premium. Below we have listed some of the major factors of consideration that may have an effect on your motor vehicle insurance premium.
Type of cover: The type of cover that you choose will have an effect on the premium for your policy. There are two main types of cover offered in Hong Kong for vehicles: Third Party and Comprehensive. Typically a comprehensive policy will be more expensive than a third party plan; however there are some exceptions to this.
Make and model of the vehicle : This is, outside of the type of coverage that you require, the most important factor in obtaining a motor vehicle insurance quote. Some vehicles are classified as 'high risk' and can only be insured through a limited number of insurance companies, while other vehicles can be insured anywhere.
Engine power : The more powerful the engine of the vehicle the more the premium will be. This is especially true in regards to motorcycles and scooters. The size of a vehicle's engine will directly affect the power and performance of the vehicle and bigger engines imply a higher risk.
Age of the vehicle : The age of a vehicle is very important when determining the insurance premium. Typically vehicles that are 10 years old at the time of application will have a loading imposed on the premium. This is because older vehicles are seen as being less reliable and as such impose more of a risk.
Value of the vehicle: If you are obtaining a comprehensive insurance policy then the value of the vehicle will directly affect the plans premium. The more the vehicle is worth the higher the premium will be. More expensive vehicles will require higher coverage limits and will be seen as a bigger risk by the insurer.
Purpose of the vehicle: When applying for motor vehicle insurance you will be asked what you will be using the vehicle for. If you intend on using the vehicle for anything other than private use (an example would be business use) there will be additional risks associated with it, and as such you can expect a higher premium.
No claims discount: No Claims Discount, or NCD, can be used to lower the overall premium by up to 60%. In order to use NCD to lower the premium you must prove to the insurer that you have more than one year of claims free insurance. To find out more about NCD, please click here.
Occupation of driver: The occupation of the driver will affect the risk involved in providing insurance. If the driver is a professional race car driver then there will be a higher risk involved than if the driver works in a white collar profession.
Young Driver: A young driver is classified as any individual who drives the vehicle who is under the age of 25. If a named driver on the policy is a young driver then the premium will likely be more than if they were over the age of 25. The reason for this is that young drivers pose more of a risk and as such the insurer will usually impose a premium loading on their insurance.
If you have any questions regarding your premiums, please contact us today.