Buying a car has been a dream to many and now with growing income levels and the availability of cars in all price ranges, it has become easier for people of all income classes to buy a car, maybe new or pre-loved. Now after buying a car, it is important to get insurance. It is not only mandatory but also in favor of the owner to have the car’s adequate car insurance.
If you are new to the system of getting four wheeler insurance
then probably you will have quite a few questions in this regard like what is the adequate amount of insurance for my car, is the four wheeler insurance premium affected by the type of fuel used in car, does car model affect insurance premium and so forth.
The answer is yes, a lot of demographic factors, vehicle-related factors, and insurance-related factors affect the insurance premium you pay every year. Here is an overview of the factors that affect your insurance premium
Factors affecting the premium amount of a car insurance policy
Age of policy taker
If the driver’s age falls within 18 years to 25 or 26 years, the insurance premium will be on the higher side as it is evident from records that the people of this age group are more likely to cause accidents. This increases the chances of making a claim under the insurance policy and hence the premium is also on a higher side.
Profession of owner
If the driver is involved in a profession that increases his chances of being involved in an accident then the insurance company assesses him in a category under which he has to pay a higher premium.
Driving history plays a very crucial role in your insurance premium. Yes, if you have a history of being involved in an accident involving error or fault on your part then you will be liable to pay an increased premium. It should be noted that this shall be the case when it was your fault. If the accident involved nothing which could have been avoided on your part then the insurance premium remains unaffected.
Purpose of using the vehicle
If the vehicle is used for commercial purposes, it attracts a higher premium under commercial vehicle insurance
as compared to the vehicle that involves personal usage.
Car Company and Model
The manufacturer, type, and car model does affect the car insurance premium. T his is because insurance companies keep a record and analyze which manufacturer and which models have a higher number of claims being made and this affects the premium amount also. Apart from that, high-end cars have higher premiums as compared to lower-range cars.
Type of fuel used in car
Nowadays, cars can support not only petrol and diesel but also CNG and LPG and few also have electricity supported engines. Based on the type of fuel a vehicle uses, its insurance premium also changes.
There is a direct relationship between the engine capacity and premium amount. Higher the engine capacity, more will be the premium amount. If your car has an engine with a lower capacity, you will attract less premium.
Age of car
The premium amount is generally 2%-3% of Insured Declared Value(IDV) and IDV is determined by subtracting depreciation from ex-showroom price. Hence, a newer car shall have a higher IDV leading to a higher insurance premium and vice-versa.
Place where the car is registered
The registration is divided into two categories- metro cities and non-metro cities. The cars having registration in metro cities will attract a higher premium and the non-metro cities registered cars will have a lower premium.
No Claim Bonus
‘No Claim Bonus’ is the benefit where you get a discount on the insurance premium to be paid by you if you have not claimed anything in the preceding years. The only limitation here is that once you put a claim, your no claim bonus is gone and you will be liable to pay a higher premium.
Determine your quote with a car insurance calculator
to purchase a policy that caters to your requirements while being easy of the pockets.
Can the premium be charged based on caste or religion?
No, it will be considered a criminal offense if someone charges the premium amount based on caste or religion.
Is there any discount on the premium amount offered if you take multiple car insurances at the same time?
Some insurance companies may offer a multi-car discount if you take insurance of multiple cars at the same time.
Is there any other way to get a discount on your insurance premium?
‘No Claim Bonus’ is the discount given in the succeeding year if you have not claimed anything in the preceding policy year.
Does opting for add-ons add to your insurance premium?
Yes, every add-on shall increase your insurance premium. The amount of increase shall be dependent on the add-on opted for.