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How does a motor insurance calculator work?

Written by Umair

How does a motor insurance calculator work?

Motor Insurance Calculator

In the last few days, we noticed that people frequently use a motor insurance calculator to get a policy quote. However, we saw that there was still a lack of clarity regarding how the calculator functions. Therefore, to make things easier for you (as always), we decided to inform you how a motor insurance calculator works.In fact, in this piece of writing, we don’t just tell you about the workings of a motor insurance calculator. But, virtually anything and everything that can help you to get THE best policy quote! We could have focused on the calculator functions for other policy options, but then again, we thought to do it some other time. As a result, today, we will focus on the workings of a car insurance calculator!

We bet you might have sometimes wondered about the back-end workings of this valuable tool, which helps you get a great coverage price. We don’t blame you if you have a curious mind like ours.

Fasten your seat belts, folks! You are sure to be left fascinated after reading this piece of writing. Below we discuss how the coverage price for your vehicle is calculated. So, without any further delays, let’s start.

Motor Insurance Calculator FAQs

What is a motor insurance calculator?

Well, as you may (or may not) know, the car policy calculator is an insurance comparison tool provided by some companies to facilitate the calculation of car premiums. t was specially made for people like you who are low on time but also need to keep their automobiles safe. Basically, a lot of people did not like and sometimes did not even have time to go to the insurance company’s physical office due to several reasons. As a result, this tool was created by entrepreneurs who identified a market gap and wanted to do something useful about that.

What details are needed by a motor insurance calculator?

To calculate anything, we need some inputs. Likewise, for calculating insurance premiums, we need some inputs too. Generally, these details are quite a few but play a vital role in calculating your insurance premium. Therefore, you need to provide the following details beforehand: Car Year, Car Make, Vehicle Model and the Model details. Using the above-provided information, an insurance comparison portal will determine your car insurance premium online. Additionally, they allow you to compare between different companies too!

How quickly can a motor insurance calculator provide you a quote?

The primary reason for the emergence of online premium calculators was to promote convenience and save time as well as money for the clients. Therefore, you should know that the motor insurance calculator gives you a quote almost instantly. But, how quick to be precise? Well, different comparison portals provide you with a quote in the different time frames. Increasingly, however, you can receive your car premiums quotes in under a minute or even 30 seconds!

How to get motor trade insurance?

In order to apply for motor trade insurance, you must prove that you belong to the motor trade industry. 

How is motor insurance premium calculated?

Here is the formula to calculate motor insurance premium.

Own damage premium= IDV * [Premium Rate (decided by insurer)] + [Add-Ons (eg. bonus coverage)] – [Discount & benefits (no claim bonus, theft discount, etc.)]

How to check motor insurance?

The most common and basic way to check a motor insurance claim is to visit the website of the insurance provider.


Now, if you compare this with the earlier practice of visiting an insurance providers’ office, you can see that this is VERY convenient. While earlier on, you had to incur fuel costs in addition to mental fatigue, now you can do away with all these needless hassles.Isn’t it quite obvious why you see a large number of people attracted to a motor insurance calculator?Do you like this article so far? You may also like Motor Insurance Quotes To Get A Lot Easier

However, you should always follow the guidelines provided by the Insurance Authority before getting your self a policy quote.In fact, it frequently publishes important guidelines for the insurance sector which all the companies have to adhere to.This takes us to the next section of the article.These are some of the other factors that can potentially affect your car insurance premiums.

Other factors affecting car premiums

As we discussed above, insurance comparison portals have made things quite easy for buyers like you.

However, a motor insurance calculator can give you only a general estimate of your policy options.Therefore, to get a more accurate policy quote there are a number of factors that you should know of.Also, note that these are not the only factors that affect your insurance premium.

Driving History

For starters. this is one factor that can influence your policy quote.Generally, people with a clean and clear driving history can expect your premium to be lesser than the ones with a poor and tainted driving history.Understandably, insurance providers determine your credibility as a driver based on your traffic violations, the number of accidents you are involved in and how fast you usually travel.This is because your clear record reflects that you take caution while out on the road and, therefore, it is less risky for your insurance provider to cover you.


Your age is one factor that plays an important role in calculating your coverage price.Usually, you can expect the premium amount to be higher if you fall in the age bracket of 17-25 years of age.With that said, this is not ALWAYS true but companies have statistically determined that if you are less than 25 years of age you are likely to be involved in more accidents.You may or may not agree with this factor but you cannot really ignore it altogether.So, pray that you are more than 25 years of age if you wish to get yourself insurance!

Claims history

Again, your claims history is something that is looked into carefully before calculating your coverage price.This might leave you disappointed but for this, even if you weren’t at fault, the frequency of the claims you make will push up your premium.However, this works around the other way too.If you have not made any claims, for a year (or more than five years) you an generally expect to be awarded a no-claims bonus!So, you can see how your claims history has a bearing on your insurance cost.


If your profession requires you to stay on the road more often and exposes you to more risks, then again you can expect a higher insurance quote.This is because the proximity with which you have to deal with risks is very different from someone belonging to another profession.

Similarly, your job designation will also influence your premium cost.For instance, the insurance premiums for you just will be different if you are just starting out in their professional life.

However, if you are the CEO of a company you are likely to have a higher premium cost.

Therefore, you see how your occupation plays a role in your policy cost.


If your car is not new and is relatively old, your coverage price will not be that much.This does not mean that all of you should just rush out to get an old car.In fact, this only means that the automobile you wish to get insured does not have a lot of value.

Likewise, if you possess a brand new car with a lot of customizations you can expect to pay a higher premium.This is because of the expensive nature of these vehicles and the limited availability of its modified parts.


Basically, there are some people who use their vehicles too much while others usually have their cars parked in the garages.Therefore, their insurance premiums is different.Our advice to you is this:Only drive when it is absolutely essential

Avoid going to a dangerous placeMore often than not, this will save your premium costs.As a result, you can benefit from a few of these tips.


Your place of residence again plays key role in your coverage price.For example, if you live somewhere where there is a high crime rate, you can expect to pay a higher premium.

Likewise, if you live in a safer area, your premium will also be lower.So, you can see how your location affects your premium costs.

These are some of the factors that affect your premium.But, you need to keep one thing in mind.By no means are the factors above exhaustive.Indeed, there are a number of other factors too that influence your policy quote.Unfortunately, they are beyond the scope of this article.

Summing up

To summarize, we covered everything you need to know about a motor insurance calculator. Firstly, we looked at what a motor insurance calculator does. We answered popular questions about calculating an insurance policy in the second section. Later on, we wrote a general note for your help. Finally, we looked at other factors that influence your vehicle premium. By now, you should know everything there is to know about motor insurance calculations. And, if you want to know more, you can always let us know.If you enjoyed reading this piece, perhaps you might like this too: How to Calculate Your Car Insurance Premium

Also, to learn more about insurance practices you can read this piece: Motor Insurance Online: Renewal, Payment & Statistics

Or, if you are trying to find out about the new and emerging practices in the insurance sector, read 9 ways Motor Insurance Dubai trends are changing

This sums up our article for today.Did you get what you were looking for?Which part of the article did you find the most interesting?How did you think car insurance was calculated.Share away your experiences below and perhaps we could learn from each other.Don’t hesitate to reach us as #WeGotYouCovered!

Originally published Sep 29, 2019 11:48:02 AM, updated Jul 18, 2022

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