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How Car Insurers Calculate Your Premium

Ever wondered how your car insurance premium is calculated?

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Who You Are Plays a Big Role


As you get older, seek out discounts at the ages of 21, 25 and even 55 which is common milestones where insurers consider a statistical reduction in the risk of a driver. When turning 60, you may be eligible for still more discounts. Check to see if your insurer offers a discount for retirees.
If you have kids below the age of 21, insure them on the parents’ policy rather than a separate policy to save costs. Insuring a teen driver can be expensive, but teenagers who maintain a very good school average (Usually at least a B-average) could qualify for significant discount. Never list yourself as the main driver on a teenage driver’s policy if you are not – This is known as fronting and can nullify your insurance cover with the company.


Single males under the age of 25 are considered the highest risk and pay the highest rates. Statistics show that male drivers are involved in more accidents and female drivers, so insurance companies charge young men higher premiums than women of the same age.


Many car insurers consider education and occupation when they set rates. Even though they usually do not publicise exactly how much a premium is affected by this, specific discounts are offered for people who work in or have degrees in particular fields.

Vehicle insurance companies have found that people in the following fields are statistically less risky than other occupations:

• Educators: College professors and school teachers
• Medical professionals: Doctors, surgeons, dentists and other
• First responders: Police officers, fire-fighters and emergency medical technicians
• Scientists: Any field with suitable degree
• Engineers: A bachelor’s or higher degree in Engineering or Architecture
• The Military: Active or retired military-related associations, Pilots
• Other: Librarians, Accountants, Lawyers and judges

Marital Status

Most insurers factor your marriage status into their risk equations. Those who are married are viewed by some insurers as less risk prone, and qualifies for a discount.


Almost all insurers will offer a discount to anyone with tertiary schooling, particularly persons with a degree are considered less risky than those without one. Some insurers might even offer further discounts to alumni of certain universities.

Driving / Claim History

Drivers with a good driving record with little or no previous claims may benefit when they purchase a vehicle insurance policy by receiving lower premiums. First-time drivers or drivers with no history on South African roads could expect a higher premium until they build up a reputation as a responsible driver.

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