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When insurance companies calculate your motor insurance premium, they will take into account the type of car, who will drive it, how it will be used, and the type of cover required. The higher the risk you pose, the more you'll pay as there's a greater the chance that the insurance company will have to pay out on a claim.

1. Drivers

Your insurers will want to know about anyone who is likely to drive - particularly their age, experience, driving record and occupation. Accidents cost insurers money, and so the less likely you are to have an accident the lower your premium.

Age

Statistically, younger drivers have more accidents. Consequently, the younger you are, the higher your premium. In fact, some companies will refuse to insure drivers under a certain age. Conversely, drivers over 50 often benefit from discounted premiums, which reflect their driving experience and the lower average miles driven by this age group. Young drivers are often offered discounts if they undertake further driver training on recognised courses, and many insurers offer a 'good grade discount' to students with a good academic record. In general, insurance premiums tend to become lower at the age of 25.

Driving Record

If you have any driving convictions, then your premium will be seriously affected. It has been shown that there is a direct link between the number of speeding convictions a person may have and their likelihood of making an insurance claim. As a result, these policyholders will face higher premiums until their driving record improves.

Drink driving convictions (also known as driving while intoxicated (DWI) or driving under the influence - DUI) are taken very seriously, and convicted drivers will find it very hard to find insurance. They will certainly have to pay far higher premiums than before their conviction. Additionally, insurers may only offer a basic level of cover. These cover restrictions and higher premiums will affect these drivers for a number of years.

Gender

Women are statistically safer drivers than men. As a result, some companies may offer lower premiums to female drivers.

2. Type of Car

Insurance premiums vary among the different makes and models of vehicles, for a variety of reasons. Some cars, such as sports cars, tend to get in more accidents, and thus cost more to insure. Others, like particular makes of family sedans, represent more risk of theft. A new car will cost more to fix or replace than a used one. When buying a car, take some time to find out how much it would cost to insure; if deciding among similar cars, take insurance costs into account.

Performance

Insurance statistics suggest that cars with fast acceleration and high top speeds often result in more frequent insurance claims.

New Car Values

The prices of new cars are taken into account as they are often a good guide to the cost of replacement and repair.

Damage and Parts Costs

This includes the likely extent of damage to the car, and the cost of the parts needed for its repair. The lower these costs, the more likelihood there is of a lower premium.

Repair Times

Longer repair times mean higher costs and the greater likelihood of an increased premium.

Car Security

Security features can decrease the premium, such as alarm or immobilization systems, high security door locks, glass etching, coded audio equipment, locking devices for alloy wheels and visible VIN numbers.

3. Usage

Annual Mileage

The more you drive, the greater the risk of you having an accident. Drivers with a low annual mileage will usually pay less than those who drive further.

Type of Use

Insurance companies aren't usually keen if you use your car for business use. Restricting its use to social, domestic and pleasure will result in a far lower premium.

Parking

Where you keep the car will also affect its insurance rating; those kept in a garage will attract lower premiums than those that use off-street parking. Cars that are simply parked on the road will pay the highest insurance premium.