In common practice taken by almost all of the insurance company in Indonesia, the premium rate likely have not been calculated by rating factors. Mostly, stipulation of the premium rate still influenced by competitive market. Too many insurance companies in Indonesia become the insurance market depend on the buyers. This article will give you the basic rating factors should be considered in determining premium rate for motor vehicle insurance.

In UK, United States and other countries in Europe, actually there are many factors that influence premium rate for motor vehicle insurance. The risk level for this insurance will be divided into three main category : poor, moderate, and high level, depend on several factors, both in relation with person or proposer and also the surrounding risk or location.

Basically, the factors affect premium rate come into several numbers as follow :

1. The age of proposer

Usually, the different age of driver will relevant with level of accident risk. The insurer have records  for 3 or 5 years later that for driver under 30 year old statistically have more accident rather than over 30 year old. Also for driver over than 60 year old maybe have same risk with age under 30.

2. Location

Lower premium price usually will be given to the driver who lives in the area with little or no traffic jam. It indicates that the more traffic busy street, the higher premium will be charged. But if the area is too far from city and isolated from public, the stolen risk maybe increase. So, the high premium maybe carried out by insurance company.

3. Driving Record or Claim History

The history of your claim will affect your motor vehicle insurance price in the next renewal date. Some insurance companies will make record for each of your claim type as well value of claim. The higher premium certainly will be taken for bad claim record. Moreover, maybe your insurance company will refuse your renewal insurance proposal .

4. Occupation of Vehicle

It will be easier to be understood that motor vehicle occupation will have relevant correlation with level accident risk. For example, motor vehicle used daily as cargo transportation will face more accident risk rather than for personal or non business purpose.

Beside above factors, there are additional rating consideration, like ownership of vehicle, distance between working place to home, driving experience, how your vehicle put at home, and other person usually drive your car.