What Changes The Cost Of Insurance Cover?

Many people tend to ask themselves why the cost of car insurance coverage fluctuates and sometime never seems to get stable

. There are quite a number of explanation to this, some of which depends on the insurance policy an individual is interested, and others on some external factors which we have no control over. An individual can maintain cheap insurance cover premium should they find ways to limit issues that are associated with the risk components on their cars. For instance, an individual can install additional car security features whenever they are interested in attracting cheap car insurance coverage premium.

Following are some possible factors which affect change in cost of insurance covers; these factors affect the fundamentals of insurance premium pricing.

Cost of litigation

Most insurance companies end up paying more from the raising cases of claim settlement litigations. In most cases the jury tends to rule against the insurance interest, these rulings may have the insurance pay lots of money in terms of litigation penalties especially if the case involved serious injuries or death.

NHS settlement costs

Emergency departments are now allowed to claim costs of treatment from relevant insurance companies. These costs are paid by the insurance company of the individual who's to blame for the accident occurring. These bills can be surprisingly expensive as they include overhead cost such as ambulance hire, and overall treatment.

Insurance Investments

Insurance companies invest premium received in a number of investment vehicles. Bonds and stocks in blue chip companies are the preferred investments vehicles for most insurance companies. When the economy is experiencing negative inflation effects then the investment positions of these insurance companies can be negatively affected. Raising the cost of insurance can be a viable option for keeping the insurance interest at par.

Uninsured Drivers

Statistics show that for every 20 drivers one is likely to have no insurance policy; however this research may differ in a number of independent consumer surveyors. This fact can influence bad experience should one be involved in a car accident with an uninsured party. In this situation, the individual claim settlements from their insurance company, this is seen as loss in the eyes of the insurer since they have no means of recovering the cost of the claim.

As earlier mentioned, one can initiate ways of reducing car insurance coverage by reducing the risk factor associated with the terms of their cars. However, one can do little in changing the above mentioned point to turn to their favour.

by: Al Callaghan

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