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In order to drive any vehicle on UK roads you must have valid insurance. A car insurance premium is calculated using several basic factors.

Here is a list of the main factors that are used to calculate your car insurance premium:

• Age – Younger drivers pay the most, along with new drivers
• Gender – Women often get cheaper car insurance than men
• Car (Insurance Group) – The higher the number the more it costs (1 to 20)
• Type of Cover Required – Fully Comprehensive being the most expensive and third party the cheapest
• Excess
• Job – Professions which involve a lot of driving can increase insurance premiums
• Where the vehicle is kept overnight – i.e. in a secured garage, on the driveway or on the street
• Annual Mileage – More mileage means a higher premium
• No Claims Bonus – The more no claims bonus you have, the cheaper the insurance premium
• Any modifications made to the vehicle

Like all insurance quotes, car insurance premiums are calculated by insurance underwriters who will first perform a risk assessment. They then provide a competitive quote that will ultimately make the insurance company money in the long run. The majority of insurance companies have set guidelines and price plans in place which produce quotes automatically, this is how online insurance companies are able to provide quotes fast and efficiently.

There are three main types of car insurance cover offered by the majority of insurance companies. These being: third party only insurance, third party fire and theft and fully comprehensive. Each type of cover naturally offers a different level of protection.

However when choosing car insurance cover, do consider the fact that it is not always in your favour to take out a lesser cover i.e. third party only, simply as a means to save money. Nor must you feel obliged to take out maximum cover unless of course you feel it is truly necessary. Weigh up which level of cover offers the best deal in both value and protection before you make your decision.

Third party car insurance is normally the cheapest cover. It will protect any third party (excluding yourself and your car) in the event of an accident. It also protects any passengers you might be carrying in your vehicle at the time of an accident.

Third party fire and theft has the same level of cover as third party only but with the additional cover in the event of a fire or the theft of the vehicle. As the cost of this type of cover is only fractionally more than third party it may be worth considering paying that little bit extra for added protection.

Fully comprehensive car insurance cover, as the title suggests, basically covers everything in the event of an accident, fire or theft. Should your vehicle be involved in an accident, be written off, stolen or burnt out, the insurer will pay out the costs of full repair or replacement based on the current market value of the car. The vehicle is covered against any accidental damage caused by yourself or another party. For cars valued at £1,500+ fully comprehensive cover is generally recommended, however the majority of insurers will only offer a fully comprehensive policy to vehicles whose value is superior to £3,000.

If you have any points on your license your premium is likely to be increased, although many insurers are now much less severe on premium hikes such the elevated number of speed cameras currently in operation. Existing claims also cost more as any claim in turn makes you a potentially higher risk to your insurance company.

With regards to women being eligible for lower car insurance premiums, this does not mean that women are considered better drivers. The simple fact is that although women have just as many accidents as men, the type of accidents tend to be minor therefore costing their insurance company a lot less money. Statistics show that 85% of serious road offences are actually committed by male drivers, which consequently affects their premium.

All car insurance policies come with “excess”, whether this is compulsory or voluntary. Car insurance excess is the sum of money you must pay should you make a claim on your car insurance. If for example your excess is £150 you will then have to pay the initial £150 of any insurance claim. Therefore the excess is the first part of any claim and the remaining sum beyond this figure is paid by the insurer. Some car insurers make excess a compulsory feature of their policy whilst voluntary excess only applies if the driver has chosen to have it added within their policy. The higher the excess you agree to pay, the lower your premium works out to be.

With young drivers compulsory excess is practically the norm with drivers under 21 eligible for excess up to £500. Once the driver reaches 25 the excess generally come down and thy then have the option to negotiate a voluntary excess sum.

A no claims bonus, also known as a no claims discount, can also affect your car insurance premium. If after the end of the year you have not made an insurance claim you are awarded one years no claims bonus. This can build up over the years however some insures do set a limit of 9 years no claims bonus as the maximum. Basically by acquiring an NCB you are proving to the insurance company that you are a safe low risk driver and as a reward your premiim is reduced each year as your no claims bonus builds up.

Overall, the cost of car insurance can differ greatly from one insurer to the next so it is important to compare as many quotes as you can before you make your decision. www.moneyoutlet.co.uk can help makes things very easy by searching over 95% of the UKs top insurance companies to help find you the best possible quote to suit your needs.