The Risk Factor Rating System (RFRS)
The Risk Factor Rating System (RFRS) is used by insurance companies to determine your premium. RFRS analyzes data on you and your vehicle to calculate how likely you are to get into an accident. So the higher the RFRS rates your risk factor, the higher your car insurance premium will be.
The RFRS analyzes the following factors:
- The Vehicle’s Make and Model: Vehicles that are popular and have large engine capacity will always have higher premiums – that’s because “fast” cars are more likely to be involved in accidents.
- The Vehicle’s Age: Used cars generally have lower premiums – up to 30% lower than newer cars. But keep in mind that COE cars will have lower premiums than PARF cars because they’re much older.
- The Sex of the Driver: Men will have to pay higher premiums than women – that’s because men statistically are more likely to be involved in a car accident than women.
- The Age of the Driver: If you’re under 30 or over 70, you’ll have to pay a higher premium because there’s a greater chance of accidents for inexperienced or elderly drivers.
- The Experience of the Driver: Drivers that are inexperienced (under the age of 30) or over the age of 65 will pay higher premiums. If you’re between this age gap and haven’t had an accident for four consecutive years, you’ll pay much lower premiums.
- The Driver’s Claim History: Drivers with no previous claims will pay a lower premium. But if you’ve had even one claim that’s cost insurers $5,000 or more, you’ll end up paying among the highest premiums.
- The Vehicle’s Usage: If you drive your vehicle on a regular basis, you’ll have to pay a higher premium – especially if you’re driving a commercial vehicle.
- The Type of Coverage: The type of car insurance policy you purchase will affect your premium. Generally, a Third Party Only (TPO) insurance policy will be the cheapest (and offer the least coverage), while a comprehensive insurance policy is the most expensive because it offers the most protection.
- The Demerit Points Accumulated: This is examined separately from the number of claims you have because it has to do with any traffic violations you’ve committed. If you get numerous speeding tickets for example, your premium will go up. But if you’re a law-abiding driver, you can get a Safe Driver Discount (SDD) or the Certificate of Merit (COM).
- The Off-Peak Discount: If you own an Off-Peak Car (OPC), you’ll receive a discount on your premium because your vehicle will be off the road when traffic is the most congested – during “peak” hours.