What affects the price of an MTPL policy?

Anyone intending to buy an MTPL policy will have noticed that the price offer of various insurance companies is different. The question arises - What affects the price of an MTPL policy?

The fee for the policy, or the insurance premium, is determined on the basis of the probability of the insured event and the statistics available to the insurance company in question. Each insurance company sets its own criteria that affects the price of the policy. The policy price determination methodology is kept secret by insurance companies, but there are certain factors affecting the price of the  MTPL policy. They can be divided into basic factors and individual factors.

Basic MTPL Policy Price Factors:

1. Car service prices;

2. Spare parts prices;

3. Prices for medical services;

4. Administrative expenses, taxes and fees.

These basic factors are explained by the fact that in the event of a remuneration, most of the amount is made up of repairs and spare parts, so insurers are actively following the total market price fluctuations.

Individual MTPL Policy Price Factors:

1. Vehicle characteristics - make, model, power, mass, annual mileage, colour;

2. The use of the vehicle;

3. Driver experience and age;

4. Legal status of the owner;

5. Vehicle registration site;

6. Bonus-Malus class;

7. Penalty points;

8. Inclusion of additional risks in the policy.

If two main individual factors influencing the price were to be declared, they would be vehicle data and vehicle owner information.

The above is only part of the price-affecting factors. The insurance companies are actively following the overall market situation, offers of competitors, the number of road accidents, the average amount of remuneration paid and the traffic intensity.

When buying an MTPL policy, we recommend using the price comparison tools available on the internet to find the most advantageous MTPL policy offers. Note that the prices set by the insurers are highly volatile due to competition and variable statistics.

Too much to consider? Let Perks insurance brokers guide you through the insurance maze and help find the best policy for you. Call +371 26 668 558