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Car Insurance Prices: What Decides Car Insurance Costs?
Mar 5, 2022

Car Insurance Prices: These 7 Factors Determine Your Car Insurance Cost

In India, Car Insurance policies are a must for every driver. It helps protect your vehicle from financial emergencies and have beneficial features that help the insured during their hour of need.

Car Insurance prices aren't just numbers made up by the insurance providers. After carefully thought-out calculations and analysis, an insurance company makes an educated assertion on how likely you are to claim your Car Insurance policy.

Following are the 7 factors that decide your Car Insurance price:

1. Driver's Location

Insurers usually ask for your PIN code because that decides the base car insurance cost. If you live in a highly populated or an urban area the price of your policy is likely to be higher as there are chances of more accidents happening in and around your location. This may bump up your car insurance costs.

2. Driver's Experience

A good combo of the number of experienced years and a clean driving record could get you better rates and discounts on your car insurance policy.

3. Insured Declared Value (IDV) of the vehicle

The Insured Declared Value (IDV) of your vehicle determines the premium you pay. Your car insurance prices have a direct connection with your car's value. If your car is expensive, it definitely shoots up car insurance rates. Premium payment is also affected by the type of fuel your car uses, manufacturing date, date of registration and any expensive components used in the making of your car.

4. Robbery or theft

Some cars are more likely to be stolen than others. Car models that are included in the 'top ten most stolen list' tend to have higher car insurance rates than those that are not in the list. Car alarm systems or other anti-theft features can lower the premium.

5. Driving history and activity

If you have a past record of accidents, you are likely to lose out on the reduction of your car insurance cost or any other applicable deductions.

6. Use of the vehicle

Car insurance prices vary for personal as well as commercial vehicles. If the vehicle is used commercially, insurance companies charge a higher premium, given that it's a source of income.

7. Add-ons

Add-ons enhance the coverage offered by the Car Insurance policy. With each add-on that you purchase, your car insurance cost will go up. Some add-ons offered include consumable expenses, conveyance benefit and accident shield.

Insurance providers allow you to calculate your car insurance prices within a few seconds, using the car insurance calculator online. They also offer value added services like 24x7 spot assistance, lock and key replacement cover, own damage cover and zero depreciation cover.

Your favourite vehicle, however simple or advanced it might be, will bear certain amount of risk. Therefore, along with owning a vehicle, the idea of its insurance must be carefully planned as well! Compare Car Insurance rates to avail a policy that offers sufficient coverage and falls within your budget.

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