How your car insurance quote is calculated
Discover what factors affect your car insurance premium and the impact they have on the price of cover in Ireland.
What affects the price of your premium?
Insurers set the price of your car insurance by assessing risk and the likelihood you’ll make a claim.
To calculate your quote, they’ll collect information about your:
- age
- location
- vehicle
- claims history
What information do insurers use?
Insurers weigh up a wide range of factors to determine how risky you are and what you could cost them. Their calculation is based on the personal information you provide and your driving history.
Alongside your personal data and driving experience, insurers assess risk by the type of car you drive and what you use it for. They do this by identifying your car insurance group and class of use.
Here’s a summary of factors which insurers use to calculate insurance premiums.
Your age
The younger you are, the greater the risk of having an accident, so insurers will charge higher rates for young drivers under 25. If you’re an older driver over 65, you may also find your insurance premiums creeping up, regardless of your driving history.
Where you live
Location is one of the key factors affecting insurance costs. Urban areas are considered higher risk than rural areas and if you live in a high crime area you’ll pay more. Insurers will also assess an area for traffic accidents and claim rates, so take steps to keep your car safe when parked.
What you do
Your job affects the price you pay for premiums, especially if you use your vehicle for work. A job with high risk or lots of driving will mean you’ll pay more for your premiums. Some insurers use this Class of Use to assess risk. There are two broad categories, with the second identifying more business mileage.
Your driving experience
The longer you’re behind the wheel, the cheaper your premiums get, especially if you have a clean driving record and no criminal offences. Points on your driving licence will push up your premiums and make it harder to find cover
Your annual mileage
The further you drive, the greater the chance of accidents or breakdowns, so insurers will view you as a bigger risk. Conversely, if you work locally or only drive on weekends, you’ll be assessed as lower risk and premiums will reduce.
Your claims history
Once you’ve made a claim on your policy you could pay up to 40% more at renewal if you’re found liable for accident costs or make multiple claims in one year. You’ll also lose your no claims discount if you have one.
Your cover level
You can choose from Third Party, Comprehensive or Third Party, Fire and Theft cover. The more comprehensive your cover, the higher the price but it’s important to get the right cover for your driving habits, so don’t just opt for the cheapest level.
How you pay
Most insurers give you the option to pay annually or in monthly instalments. If you pay a monthly premium you’ll pay extra due to interest charges. It’s cheaper to pay upfront, but with the average annual premium over €600, this isn’t always possible.
The excess paid
Car insurers charge a compulsory excess you must pay towards a claim. In addition to this compulsory excess, a voluntary excess is the amount extra you agree to pay should you make a claim. You can get a cheaper premium if you opt to pay a higher amount of voluntary excess.
Car insurance group
Some insurers use a system which places cars into groups and classes according to their risk profile. Several major insurers use this method to assess which cars will likely generate the most costly insurance claims. Every make and model of car is assigned to one of 50 insurance groups.
What are car insurance groups?
It’s a system some insurers use to assess the level of risk. The greater the risk, the higher the group number it belongs to, while lower-risk vehicles will belong in the lower groups.
Car insurance providers in Ireland don’t have an industry-wide standard like the Association of British Insurers (ABI) Group Rating system, and insurers in Ireland tend to keep their rating system under wraps.
However, some Irish insurers use a similar rating system that assigns a make and model to one of around 50 insurance groups.
If your car falls into one of the low insurance groups, you’ll pay a cheaper premium and the higher the group, the more expensive your premium will be.
How are car insurance groups rated?
A vehicle is rated by scoring across a range of categories and then placed in a group. The scoring will be based on things like
- Price
- Power
- Safety
- Damage resistance
- Security features
Insurers will also assess the cost of replacement and repairs.
Cars in the higher groups tend to be performance cars, or premium models with large, powerful engines. This is because they’re more expensive to replace or repair and are more likely to get damaged or stolen by thieves.
Vehicles in lower groups typically have small engines, a good safety profile and are cheaper to repair. Hybrid and electric cars are increasingly becoming cheaper to insure for this reason.
Irish insurers also base decisions on UK data, so what’s cheap to insure there, will also likely be cheaper to insure here.
How to find your car insurance group
To find your insurance group visit this car insurance group checker. The data comes from Thatcham Research who work with insurance companies in the UK and Europe.
You’ll need to provide:
- The manufacturer
- The model
- The year
- The body style
- The fuel type
To find out more about the safety profile of your car, visit Euro NCAP.
What are the 10 cheapest cars to insure?
| Car make | Car model | Insurance Group |
|---|---|---|
| Volkswagen Up! | MPIi 1.0L Manual | 2E |
| Skoda CitiGo | Colour Edition MPI Manual | 2E |
| Nissan Micra | Acenta 71 1.0L Manual | 1E |
| SEAT Ibiza | S 1.0L MPI 75PS 5d Manual | 2E |
| Toyota Yaris | Active VVT-I 1.0L Manual | 2E |
| Hyundai i10 | Go! SE 1.0L Manual | 2E |
| Dacia Sandero | Access SCE 751.0L Manual | 3E |
| Kia Picanto | 3 DPi 1.0L 2020 | 2A |
| Volkswagen Polo | Active MPI EVO 1.0L | 1E |
| SEAT Mii | Design 1.0L manual | 2E |
Collated from Admiral, LV/Autotrader, Uswitch and Carzone.ie
What is class of use?
How you use your vehicle also impacts the price of your premiums. This is called ‘class of use’ by insurers.
Most drivers will use their car for social, domestic and pleasure purposes (SDP) but more often than not, your car will also be used commuting to and from work.
You can also use your car for limited business purposes without buying commercial vehicle insurance. However, if you use your car or vehicle for business, you’ll need to declare this when you get quotes.
There are two broad classes of business use in Ireland, although different insurers may use different systems. Contact insurers directly if you’re unsure about your class of use.
The insurance company could refuse your claim if you don’t declare business use, so make sure you accurately describe how you intend to use your car.
Class 1
This allows you to use your car for:
- social, domestic & pleasure purposes
- commuting to work or place of study
- use in connection with your business
Annual business mileage may be limited to 1,600 kilometres paid or up to 3,200 kilometres unpaid.
Class 2
You can use your car for the same as Class 1, plus:
- the carriage of goods and samples
- Your spouse or a named driver can be added to use your vehicle for the same business purpose.
The maximum mileage covered per year under Class 2 is 16,000 kilometres.
Does car age affect the price of cover?
It depends. If you own a car over 10 years old you may find it hard to find an insurer who’ll cover your car and you may find that premiums are more expensive.
This is for several reasons, such as:
- Sourcing parts
- Repairs and maintenance can be more expensive
- Fewer safety features
On the other hand, a new car is more expensive to replace than an older car and could be more attractive to thieves so may cost more to insure.
Older cars that are classed as classic or vintage cars may be cheaper to insure. Visit our classic car cover page to learn more.
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