By J Abela
Article Source: http://EzineArticles.com/3612419
When buying a new car it is important to also consider its running costs. One of the major yearly cost is insurance. Motor insurance is compulsory in all developed countries but is perceived as a necessary evil. Unfortunately, the large awards given by courts to victims of traffic accidents for example, will reflect in the insurance premium charged. Motor accidents are unfortunately high and compulsory motor is there to protect the victim in case of a life long injury, disability or the victim's next of kin in case of death.
Calculating motor insurance premium basic rate is quite mathematically intensive and requires an in depth knowledge of actuarial studies (statistics). Statistics include driver's ages, a car's engine size and speed, value of vehicle, number of accidents and so on.
Motor Insurance Clerks calculate an insurance premium using the following basic formula:
Basic Premium (taken from the company's rates table depending on the car's engine size)
+ Additional Premium (if the vehicle value is greater than for example EUR2000)
+ Driver Age Loading (normally a percentage depending on the driver's age - the younger the driver, the higher the loading)
- No Claims Discount (good drivers get awarded no claims discount percentage which will reduce the premium)
+ Tax (depending the market the insurance company is operating in)
= Total Premium
This method is of the simplest kind and will vary in different markets (example European, UK and American).
When buying a car, it would be helpful to have all this calculated automatically and immediately while browsing through your 'possible' future car. This will avoid you having to stay contacting your local insurance agent and asking them for a quote for every single car you might be interested in.
From an information technology perspective, such a system will have to make use of modern technology to combine to services together and produce added value - the insurance premium. Such a system will combine the insurance quoting engine and the car dealers database of cars.
Link: [http://www.whatismypremium.com]
Article Source: http://EzineArticles.com/?expert=J_Abela
Article Source: http://EzineArticles.com/3612419
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