How Insurers Calculate Premiums Page
One of the most common questions insurers receive is how are premiums calculated?
Unfortunately we can’t give a universal answer for this as every car insurance company in Hong Kong will have their own way of determining price.
We can give you a general overview of the many things we consider when coming up with your car insurance premium.
In general at DirectAsia, we feel that many in Hong Kong drive responsibly and those who do should be rewarded with lower prices. But we also know that not everyone’s experience is the same and so we also offer customised pricing for things like when you need a chance to repair your driving record or lower rates for infrequent drivers.
The factors listed below are some of what we consider when you get your insurance quote price with us.
Some of what we consider
Young and/or inexperienced drivers are perceived to be a greater risk due to having less experience on the roads. As such, young and/or inexperienced drivers will typically pay higher premiums than older drivers.
Someone who’s made numerous claims or been in multiple accidents will be considered a higher risk than a safe driver. Most companies will usually factor in the last two years' driving experience.
No Claim Discount
A No Claim Discount is a discount you get when you go a year without a claim. Insurance companies will give you a discount every year if you don't make a claim, up to a maximum of 60%.
Occupation Based Usage
The nature of your job can affect the cost of your car insurance premium. For example, an admin executive only needs the car to and from work but a sales person will have to travel to different locations to meet customers to hit their sales target.
How Many Miles
If you drive less your risk of an accident decreases. DirectAsia will give you a lower premium if you’re a low mileage/off-peak driver.
The Value of Your Car
How much your car will cost to replace is a major component of your car insurance premium. If you drive a VW Golf you’ll pay less than a Ferrari.
The size of the engine affects the insurance premium, as faster driving/acceleration poses a greater risk on the road for speeding/accidents. Note that a turbo engine car will often be charged higher even though they have a lower engine capacity.
Own Damage Excess
This is how much you've chosen to pay before the insurance company pays to reimburse your car accident repair. The higher the excess, the lower the premium.