Insurers use lots of different things to work out the cost of your motor insurance.
From your age and where you live, to the vehicle you own and how you use it, insurance companies use these factors and more to build a picture of how likely you are to make a claim.
Let’s take a closer look at how we work out the cost of your Zego policy.
Pay-as-you-go insurance
If you’re getting a quote for our flexible hourly delivery insurance, we’ll need to know a few details before we give you a price.
Here are a few of the main things we need to know:
- Your age and address.
- The type of vehicle you use for work.
- Your driving history, including any previous claims or convictions.
- Your no claims discount (NCD), if you have one.
- Where you keep the vehicle when you’re not using it.
Generally speaking, the more expensive and powerful your vehicle, the more you pay to insure it. Also, too many past claims and penalty points on your licence can drive up the price.
If you’re a young or inexperienced driver, you’ll probably pay more, at least until you’ve built your driving history and no claims discount. And, if you live in an area with a high rate of vehicle crime, or you park overnight in an unsecured area, you might see your price go up.
It’s all about how risky you are as a driver. The higher the risk of making a claim, the higher the cost of insurance.
Knowing what affects your insurance cost, and the things you can do to lower the price, can help you to pay less for your cover now and in the future.
Annual and monthly policies
When working out the cost of your monthly or annual insurance, we use similar risk factors to those shown above.
However, there are a few key differences that determine how much you’ll pay for a fixed-length policy.
Annual policies usually work out cheaper
Over the course of a year, you’re likely to save more on your insurance by paying by the year rather than by the month.
That’s because paying monthly is a bit like getting a loan from your insurance company. You’re basically spreading the annual cost of your policy over 12 months.
This “loan” often comes with interest and service charges, which get added to the cost of your policy. By paying your insurance upfront for the year, you can avoid these charges, helping to reduce the overall cost of your insurance over time.
You can learn more about annual vs monthly policies on our blog.
The level of cover matters
For most of our policies, we offer 2 levels of cover: Third Party Only and Fully Comprehensive.
Third Party Only is the minimum legal requirement in the UK. If you’re involved in an accident, it covers damage to other people and their property. But, it doesn't cover you or your vehicle.
Fully Comprehensive is the highest level of cover we offer. It provides all the protection of our Third Party insurance, plus it protects you and your vehicle. It gives you complete cover and peace of mind when out on the road.
As Fully Comprehensive offers more protection, it generally costs more to buy.
It’s worth noting here that, even though it may be tempting to choose Third Party insurance to lower your price, it can leave you without enough protection in the event of a crash. This means you’d have to pay for some of the costs, fees or repairs out of your own pocket.
Before making a decision, be sure to spend some time considering the type of driving you do, and how much protection you’d need if the worst was to happen.
Zego Sense policies
If you’re a private hire or business van driver, you could save more with a Zego Sense policy.
Sense is our app-based insurance that rewards you with discounts when you drive well. It uses telematics — a type of technology that measures how your vehicle moves while on the road — to build a picture of how you drive.
Using the sensors in your smartphone, it’s able to detect things like how fast you accelerate and how harshly you brake, plus other factors like where and when you drive. Then, using clever calculations, it builds a profile of your average driving habits over time to give you a driver score.
The higher your score, the lower your price when you come to renew.
So, if you’re a good driver, you can get a much fairer price for your insurance.