Top factors that affect your car insurance premium
Top factors that affect your car insurance premium?
While deciding to insure your car, there are many factors that have to be kept in mind while opting for the ideal cover…we decided to share the major factors: Type of Coverage
The first decision to make is whether the insured wants a Comprehensive Cover or opt for the more cheaper and mandatory Third Party cover
Age of the vehicle
As your car gets older your premium amount increases, the reason being an older car is more prone to wear and tear. Opting for a Zero Depreciation cover with your insurance plan will help reduce your premium marginally. Sometimes the older the vehicle, the owner may chose to buy a TP coverage.
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Your Car Model and Cubic Capacity
Your premium will vary based on how expensive your car is. More expensive cars with a higher engine capacity (exceeding 1500cc), like luxury sedans and SUVs, will have higher premiums, while base car models with lower engine capacity (below 1500cc) will have lower premiums.
IDV (Insured Declared Value) of the vehicle
The current value of your as per the market rate is your IDV and the higher the IDV higher the premium. What can help is increasing the voluntary deductible amount or in simpler language increasing the amount you shell out in case of a claim while the rest is taken care of by the insurer significantly reduces the premium amount.
Car Insurance Add-Ons
A standard motor insurance policy provides coverage for a considerable range of damages to the motor vehicle. Along with the basic motor insurance policy, however, one can avail of a range of car add-on covers that provide additional coverage in varied and specific scenarios. Many car insurance add-ons will offer liability coverage and protection in a variety of scenarios you may be affected by on a regular basis, and which are risks that you can be left exposed to in the case of a standard insurance policy. Add-ons are an important insurance premium variable as their addition to a policy will have an impact on the premium and lead to an increased premium.
Opting for Voluntary Deductible
This means that you as the policyholder declare to the insurance company that at the time of raising a claim, you would pay a certain percentage of the claim amount. Therefore in any unfortunate situation or accident wherein you are faced with monetary loss and need to raise an insurance claim, some amount of the claim amount would be paid from your pocket. However, while this would lead to a discounted premium and saves money from the premium amount, it is not advisable as it increases your liability at the time of a claim.
Your Geographical Location
Where you reside and park your car is also a factor that affects your car insurance premium. If you live in a region prone to vandalism or theft, your premium amount may be on the higher side to offset any potential losses.
No Claim Bonus (NCB)
Insurance companies offer a discount on the premium (on car insurance renewal) if you haven’t raised a claim during the previous policy period. Do not be in a rush to raise a claim. Look at the NCB component (if applicable) before raising a claim and then decide if it makes sense to raise a claim or not.
Anti-theft Device / AAI Membership
Protecting your vehicle with an anti-theft device that is certified by the Automotive Research Association of India (ARAI) might fetch you a discount on car insurance premium. Do not miss out on this one! Similarly being a member of the Automobile Association of India will also provide a discount upto 5%.
Insurance premium for cars that run on Diesel and CNG is more than the premium for cars running on Petrol. You can easily find out the premium amount for your car and its fuel type while buying car insurance online.