New Driver? 4 Factors That Affect Your First Car Insurance

High 24


Insurance companies are taking additional factors into consideration when you wish to purchase your insurance after the de-tarrification announcement. In doing this, insurers hope to offer a better, competitive premium that perfectly suits the customer's needs while maintaining driver’s safety on the road.

However, whether the cost will be higher or lower will ultimately depend on you, or more specifically your individual risk profile. If your insurer believes that you have a high chance of claiming your insurance than others, you’ll be charged a higher premium rate.

Not to worry!! We have compiled the main factors that will influence your risk profile and affect your overall insurance cost. By understanding them, you’ll be more informed and prepared when you’re buying your first insurance!

1    Age and Gender

 Yes, regrettably your age and gender do affect your premium and it is a factor which can’t be avoided. Insurance companies tend to refer to national statistics to allow them to evaluate which demographics have more or fewer risks and adjusts accordingly.



In terms of age, the younger you are, you are more likely to be involved in a road accident. Likewise, if you’re not a youngster but you’ve only had your driver’s license for a short time, you will be paying a higher premium. Why? Because they will judge you on how much driving experience you have.

 In terms of gender, male drivers are more likely to be involved in car accidents compared to female drivers as men are more inclined to take risks while driving. Notwithstanding the whole women-are-bad-drivers stereotype, they do drive safer and have a better chance of getting lower premiums than their male counterparts.

 Although it is unfair, most insurance companies in Malaysia have unanimously taken these two factors seriously into account.



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2.     Type of Car You Own and Drive

This isn’t a surprise factor as cars have values of their own which can affect your insurance cost. If it’s up to us, we would like to own our dream cars but there’s actually a big difference in premium between a normal Perodua Myvi and a Honda Civic. Undoubtedly, the more expensive the market price of your car, the higher your car insurance because it is equivalent to the sum needed to be insured.

Additionally, the payout is higher too as high-end cars are riskier for the insurers due to the post-maintenance aspect of your vehicle and the likeliness that your vehicle will be stolen. Thus, expensive car owners will have to bear a higher premium.

However, this can be avoided by equipping your vehicle with various anti-theft features such as steering wheel locks, electronic immobilizers or a tracking system. This will consequently increase your car’s theft protection ratings as well as decreasing your insurance costs.

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3.     Address and Car Location

Similar to how your premium is affected by the value of your car, where you live, drive or park also plays a role in determining your risk profile. This is because these two factors help insurers to decide how safe is your vehicle at these locations.

For example, if you live in a rural area with little traffic and park your car within a secure compound, you’ll have a higher probability of paying low premiums because the chance of a car accident or theft to occur are lower in these areas.

But if you live in a busy, populated area with high crime rate and park your car along the streets, you might have to pay more because your car is more likely to get into accidents, stolen or vandalized. As a result, your insurance company will have to bear the loss when you make a claim to them. This is why in the end, urban-based drivers will likely to experience premium rate increase than rural-based drivers.

You can move to safer residential areas if you wish to pay lower premium rates but another easier way of decreasing your insurance cost is by ensuring your vehicles are safely guarded in areas that are monitored by security cameras, surrounded by gates and supervised by security guards. That will show the insurers that you’ve taken measures to protect your vehicle despite living in the city.


4.     Driving and Claim History

You may not like it if someone judges you by your driving skills but unfortunately, your driving record does get taken into account when insurers calculate your premium. So, if you have been recorded in getting in numerous car accidents, the chance of you getting into another car accident is high. Therefore, the more red flags and accidents you have on your record, the higher your risk is and the higher your insurance cost will be.

Not only that, once you’ve gotten into an accident, you will definitely claim against your insurance. Once insurers know about your bad record and previous claim history, they will charge a higher premium the next time you renew your policy especially if the accidents were your fault. Even if you were a victim, there’s still a chance insurance companies will hike up your premium as the probability of you getting involved in a car accident is high.


Hence don’t be surprised when the next time you purchase or renew your car insurance, your premiums is high or it had increased from the previous year!