What are the factors behind someone's choice of insurance policy? In simpler terms, how does a customer choose the motor insurance policy which suits his/her needs the best?
The accessibility to the insurer, the claim service of the insurer, the brand name of the insurer, the premium to the policy - all these factors make the insured's choice easier. A customer looks at these factors and analyses which policy would suit him the best. The premium is one of the most important factors which the customer looks at before choosing an car insurance policy hence its only important to understand the concept of the premium better!
Demystifying Premium looks at the factors that affect the premium of an insurance policy.
- No Claim Bonus (NCB): When the customer doesn't make an insurance claim for a year, then for every consecutive year, the insurance company offers the customer a certain percentage of discount on the premium. It can be considered a bonus in a way, as for every year that the customer doesn't make the claim, the percentage to the discount goes on increasing.
- The customer's profession: The profession of the customer also decides the car insurance prices . People in high risk environments such as politicians or sales and marketing professionals pay higher premiums as compared to the teachers or the bank managers whose profession is considered to be comparatively less risky.
- Car's Cubic Capacity: The rates for calculating the premiums for vehicles are stipulated by the Indian Motor Tariff Act. In accordance with that, the capacity of the car's engine is one of the factors that calculate the premium.
- The purpose of the car: Another factor which calculates the car insurance rates for the vehicle is the purpose for which it is to be used. Personal cars have lower premiums on them whereas people using their vehicle for commercial purposes have to pay a higher premium.
- The Vehicle's Value: The market value of the vehicle also affects the calculation of the premium. The market value, also known as the Insured Declared Value (IDV) is calculated on the basis of the ex-showroom price of the vehicle and eventually affects the premium. This is why imported vehicles or SUVs have a higher premium as compared to sedans and other smaller cars.
- Driving Record: The number of claims you made in the previous year are a good reflection of your driving skills. The insurance company categorizes its customers as high risk drivers and low risk drivers. A person with a driving record consisting of rash driving incidents or drunk driving tickets is considered a high risk driver who then gets charged a higher car insurance rates considered to the low risk drivers.
A car is one of the most important investments that you as a person will make in life. Protecting that car is an equally important investment to make. It is therefore imperative for a customer to choose the right car insurance policy. Checking all these factors and analysing your premium with car insurance premium calculator to choose the most suitable policy is something that everybody must do.
Not just to be money wise but also to protect their car in the best way possible. To know more about car insurance policies and how the premium is calculated, visit the Bajaj Allianz General Insurance website and protect your car in the best way.