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Video guide to how your car insurance premium is calculated

Watch our video on understanding your car insurance premium

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Understanding how your car insurance premium is calculated

To explain how your insurance premium is worked out, we’ve put together a short video guide. Some of the factors which affect your price include:

  • Your age and driving experience
  • The type of car you drive
  • Where you live
  • When and how far you drive your car
  • No Claim Discount (NCD)
  • Your claims and convictions
  • The rising costs of parts and labour
  • The number of claims being made

Buying LV= car insurance is quick and easy

LV= Video transcript to how your car insurance premium is calculated

Hello there, I'm Victoria. At LV= we pride ourselves in offering you the best possible cover at the most affordable price. Today I'm going to clarify how we calculate your motor insurance premium.

Our experience shows that young drivers are ten times more likely than other age groups to be involved in accidents and make claims.

So statistically, young drivers are more likely to be involved in serious accidents than over 35s. As such, if you are a young driver, or you wish to include a young driver on your policy, your premium will be proportionately higher.

The more experienced you are as a driver, the less likely you are to claim and this is reflected in our pricing.

The car you drive also has a bearing on the cost of insurance.

Cars with a bigger engine are often more expensive to insure as they cost more to repair. Some modifications can also have an impact on the premium price and could even result in cover being declined.

Vehicles with built-in safety features such as autonomous emergency braking (or AEB) can benefit from a better price. It is also key to note that vehicle age will also have an impact, with newer cars costing more to insure.

Where you live can also have an effect on your premium.

In areas where the risk of accidents is greater, such as more urban or densely populated areas, or if you live somewhere with a high level of vehicle crime, your premium will be higher.

Another factor that could affect the price of your premium is how you use your vehicle.

Vehicles used for business purposes will likely cost more to cover, as you'll be driving more when roads are busy.

We also take into account your annual mileage. After all, the more you drive, the more likely you are to be involved in an accident.

With LV you can receive significant discounts if you have four or more years of No Claim Discount.

Drivers who have had a motoring conviction in the past 5 years will also see a rise in their premium as they present a greater risk.

Your excess is also an important factor when it comes to the cost of your premium. The higher the voluntary excess you agree to, the less your insurance will cost. This is because you would be taking on a greater proportion of any potential claim. The opposite is also true with those choosing to only pay the compulsory excess finding their premium higher.

To sum up, the better driver you are, the more discount you get!

Remember, if you have any more questions, we are just a phone call away and are always happy to help.

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