Your premium considers the various factors included in the
costs of fixing your car when you make a claim. This also depends on whether
the car should be repaired or replaced. While the value of most cars will
decrease over time (lowering the replacement cost) these claims occur much less
compared to accidental damage claims.
The cost of repairing your car after an accidental damage
claim usually increases each year as the cost of parts, paint, and labour
increase as well. As such, the same repair to the same car will probably cost
more in the future years, even if the value of the car is reduced, and leads to
an increased premium.
In addition, insurance premiums are based on risk
characteristics where the higher the potential risk, the higher the premium and
vice versa. Examples of these include the driver’s age, vehicle’s age, vehicle
make and model.
