How is my car insurance premium calculated?

How does the amount that you pay for your car insurance actually come about? Below we explain which factors are important in determining your car premium and how it is structured.

Determining factors auto premium Net premium
Premium accrual Calculate premiums
Gross premium Compare premium

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Determining factors auto premium

Determining factors auto premium

The calculation of a car insurance depends on many factors. As a result, two people with the same car almost never pay the same premium with the same insurer. When calculating the premium, an insurance company pays attention to:

  • the weight of your car
  • the original catalog value or current value
  • the number of kilometers you drive per year
  • the number of demonstrable claim-free years
  • the age of the regular driver
  • the place of residence (the postcode) of the regular driver
  • presence of accessories in your car
  • kind of security on your car

Premium accrual

Premium accrual

The amount that you pay monthly or annually to the car insurer is made up of several elements:

  • Coverages. In addition to the premium for the all-risk car insurance, limited car insurance or third-party car insurance, you also pay – if you have chosen – a premium for, for example, passenger insurance and legal assistance insurance.
  • Cost. Some insurers charge (one-off) policy costs. There are also insurers for which you pay so-called renewal costs. These are administration costs for invoicing or renewing the insurance (policy).
  • Tax. You pay the insurance tax on top of the premiums and costs. This has been increased to 21% since 1 January 2013. With car insurance, you pay no further VAT. At Lender all prices include insurance tax. It is possible that the insurance tax is stated separately on your policy schedule.

Gross premium

The gross premium applied by car insurers is the premium as stated in the premium tables. The premium table often takes into account the region in which you live. This influences the premium level. The bonus discount or bonus payment is not included in the gross premium. This discount is deducted from your gross premium, which means you get the net premium. The amount of the discount depends on how many claim-free years you have.

Net premium

Net premium

The net premium = gross premium – bonus discount (premium payment).

Calculate car insurance premium

Calculate car insurance premium

You can easily compare most car insurance policies via Lender. Calculating the premiums is free. You can immediately see which insurance is the cheapest for you. You also determine the coverage for your car insurance. You can choose from:

  • Civil liability (WA)
  • Limited hull (WA Plus)
  • Full hull (all risk)

Compare premium

Compare premium

If you are going to calculate the car insurance premium on Lender, the prices shown are net premiums

  • including administration costs / policy costs;
  • including 21% insurance tax;
  • excluding one-off costs;

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