Insuring vehicles is a risky business. The insurance company is run and managed with the money you pay as premium. In addition, there are hefty legal expenses in insurance business which are borne out from the premium paid by customers. Of all the premiums paid, 50 per cent of the amount is kept aside to pay for the claims. Around 25 per cent of the corpus is reserved for legal expenses and administrative costs. The rest (25 per cent) is used in running the company. Although these numbers may vary from insurer to insurer depending upon the cover he provides.
Collision and comprehensive insurance covers are expensive because they cost the company dearer. Property damage occupies the biggest share of all
Car Insurance claims. Another chunk of the
money is paid on collision damage which accounts for around 50 per cent of the company’s expenditure.
The money is also spent on investigating the legality of claims and settling them. With increased competition, insurance companies also require to spend money on marketing and promotions.
Companies that provide insurance online are able to save on many of their overhead expenses which they pass it on to customers. So, look for online insurance quotes to lower your
Car Insurance Costs.
100% 
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