Car insurance calculator: Want a low car insurance monthly premium? Here's how we calculate it

Ever wondered why your friend pays a low car insurance monthly premium yet you pay more - even though you're with the same insurer?

You probably have, as it's a question that often comes up, whether it's directed at your broker or comes up during a discussion with friends. The truth is car insurance premiums aren't the same for everyone. That's because your insurer considers various factors when calculating the monthly amount that comes off your debit order.

How are car insurance premiums calculated?

At Discovery Insure, we calculate your premiums based on factors unique to you. By using data insights and advanced risk models, we tailor your premium based on your specific risk profile, excess choices, the benefits you select, and more. That way, we give you comprehensive coverage that fits your needs.

Your risk profile

In a nutshell, the less risk you pose to your insurer the lower your premium; if you pose more risk, you pay more monthly. Your premium is determined through a process called underwriting, which uses a client's risk profile to determine how much they pay the insurer each month.

Here are some of the factors that a risk profile is based on:

Age

Younger drivers, generally under 26, are considered more likely to get into accidents as they have less driving experience, so their premium is higher.

Gender

Many studies show that, on average, women are less risky drivers than men, so if you're a woman, your premium is likely to be lower.

Where you live

Some regions are riskier than others, whether that's based on crime levels or if they're more prone to natural disasters.

What you drive

The make and model of your vehicle influence how costly it is to repair or replace your vehicle.

Your claims history

You know how they say past behaviour is a good indicator of future behaviour? The same applies to your car insurance claims. So, the more you've claimed for accidents in the past, the higher your premium.

Your insurance credit score (ICS)

This is issued by a credit rating agency and is based on the likelihood of you making a claim. If you have a good ICS score, you'll have a lower premium.

Your excess and benefits

Your premium is also based on how much excess you opt to pay and the benefits you choose (and their limits).

The benefits you want also affect your monthly car premium, for example, if an insurer doesn't have automatic car hire included in a plan you'll pay extra for it through a higher premium.

External factors

Along with your risk profile and the excess you opt to pay, there are external factors that come into play when determining your monthly car insurance premium. Unfortunately, these factors are out of your control.

Factors like the rate of inflation or geopolitics, which impact the cost of labour and the availability of imported car parts, or changing theft patterns that either increase or lower the risk of your car getting stolen. Your insurer takes the outside environment into account and then adjusts your monthly car premium, so it's also aligned with these risks.

What makes Discovery Insure different?

As a Discovery Insure client, you get access to a range of market-leading benefits that many insurers don't offer, such as:

• Up to R1,500 in fuel cash back with our behaviour-based rewards programme, Vitality Drive.
• No excesses on Acts of God [weather- and natural-disaster-related] claims on our Classic and Purple Plans.
• Car hire is automatically included with no extra premium on our Classic and Purple Plans.
• State-of-the-art safety features like Impact Alert, a smartphone-linked Panic Button, a Find My Vehicle real-time function, and more.