Have you ever wondered how much car insurance premiums cost when looking to protect your vehicle? Yes, premium rates are a consideration that should be carefully considered before purchasing an insurance product. This refers to the obligations that you have to pay every month to get the benefits of this insurance. Don't let high car insurance premiums put you in financial trouble.

So, for those of you who want to know what car insurance premiums are, how much they cost and what factors affect their rates, let's check out our Qoala review below!

What is car insurance premium?

What is car insurance premium?
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When you need car insurance, you will be charged a premium. Premiums are the contributions that must be paid by customers to get the benefits from the purchased insurance. In car insurance, there is a car insurance premium that needs to be paid as per the set amount to get the protection or benefits from the car insurance products.

Car insurance premiums must be paid if you want to avail the benefits of this insurance. If the premium is not paid, you are not entitled to benefit from the car insurance product. For example, when you buy an all-risk insurance product, then have an accident in the 3rd year. Therefore, when regular fees are paid according to the agreement, then you are entitled to compensation according to the benefits of the insurance product. But, if not, the insurance company will not return the vehicle for accidents.

Car insurance premiums may vary depending on the product selected. According to OJK regulations, there is a special formula for calculating car insurance premium prices. Apart from this, there is a difference in calculating car insurance premium prices between all accident insurance and TLO insurance.

Factors that affect car insurance premiums

Factors that affect car insurance premiums
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As mentioned above, car insurance premium prices can vary. There are several factors that affect the amount of auto insurance premiums for personal protection, including:

1. Type of car insurance

You can check the car insurance premium before buying the product to know how much the car insurance premium is. The car insurance premium price per month or year is influenced by the type of car. Generally, the more expensive the new vehicle is to insure, the higher the price. Apart from this, luxury vehicle types generally have higher premium costs.

This affects the price of the car. The newer the type and generation, the more expensive the car will be and will charge a higher premium. New types of cars also have new technologies that are advanced in their features and engines. It's no surprise that the cost of car insurance premiums to be paid is rising.

2. The purpose of using the car

Another factor that affects the cost of car insurance premiums is the intended use of the car. The intended use of vehicles includes personal and official vehicles. Of course, private vehicles and official vehicles have different risks, so the premium price is also different.

The higher the risk of the vehicle, the more expensive the premium. Conversely, the lower the risk of the vehicle, the lower the premium charged.

3. Residential area

To know the price of all accident car insurance or TLO can be calculated based on the area of ​​residence. The denser the area, the higher the car insurance premiums. Because the chances of accidents or injuries are high in crowded areas.

There is a division of residential areas based on zones to determine premium rates:

  • Region I: includes Sumatra and surrounding islands
  • Region II: DKI includes Jakarta, West Java and Banten
  • Region III: It includes regions other than regions I and II

4. Miles per year

How to calculate car insurance premiums is influenced by the distance the car travels in a year. Insurance companies recognize that used cars are more prone to accidents and damage. That's why insurance premiums for cars with high annual mileage are much higher than cars with low mileage.

In fact, it's not uncommon for insurance companies to offer discounts or rebates for cars with less than 10,000 miles per year. Bigger discounts are available for cars with less than 5,000 miles per year.

5. Age and gender of drivers

The next factor that affects the cost of car insurance premium is the age and gender of the driver. The younger the driver, the more expensive the insurance premium. In fact, if the main driver of the car is under 25 years old, the premium price can increase up to 3 times. Because young drivers are assumed to be calmer while driving, the risk of accidents increases.

The driver's gender also affects the price. Teenage boys have higher premium rates than girls. Meanwhile, for older drivers, the gender of the driver has little effect on the premium rate because adults are considered to be able to drive well and are less likely to be involved in accidents and injuries while driving.

6. Driving notes

It's no surprise that police ticket records affect the cost of your car insurance premium. This traffic ticket record is displayed for the last 3 years. If you get more traffic tickets during that period, your car insurance premium will be more expensive. Not only that, if you have a bad driving record, the insurance company may or may not accept your application for vehicle insurance.

7. Credit card score

Another consideration in determining your monthly car insurance premium amount or cost is your credit card score. In this case, the insurance company will look at whether you pay your credit card bills on time or if you miss them frequently.

If you have many or frequent arrears and frequently pay off credit cards without discipline, your car insurance premium will be higher. This has to do with the insurance company's confidence in your financial credibility. In fact, if the insurance company finds a very bad credit record, it is not impossible to cancel the premium approval.

8. Auto insurance claim records

Another factor that affects the cost of car insurance is the record of car insurance claims. You can say that insurance claims records look more than driving records. The more insurance claims you have on file, aka the more frequently you file claims, the higher the premium will be. In this case, insurance companies prefer customers who do not have any claims. A discount may be given even to customers who have not filed a claim.

If claims are filed or made repeatedly, it means that the customer's driving record is classified as bad due to accidents or violations. This increases the risk of another accident and increases the premium.

9. Car garage space

Whether the car is parked in a garage or on the side of the road affects the cost of car insurance. Because a car parked in an unsafe place increases the risk of damage and theft. Some areas are prone to car theft, making the premium more expensive. For example, the city of Jakarta has a high crime rate, so the likelihood of vehicle theft and damage is high.

10. Choice of car insurance products

Finally, choosing a car insurance product will determine the price correctly. Car insurance products basically include 2 types namely TLO and general. With TLO insurance, only more than 75% damage and loss of car is covered. Meanwhile, with comprehensive insurance, all types of car damage are covered. This is why the total insurance premium is more expensive than TLO insurance.

So, do you now know what the premium is, the cost of car insurance premiums and also the factors that affect the amount? Now you can choose which car insurance is right for your vehicle. Also adjust it to your needs and insurance premium price, don't let it become so expensive that it affects your monthly expenses. Come, visit the Qoala app to get information on recommended and affordable car insurance products!