The Buyt Desk
Your Car insurance Premium can be heavy on your pockets. But you cannot ignore buying car insurance. To minimize the premium, understand the factors that affect it.
In India, most are aware of the importance of buying a car insurance policy. Practically you would have experienced it and traffic on Indian roads will surely make you understand that buying a car insurance policy is a must. And also it is a legal law in India to buy insurance cover for a car be it a new or used car. Car insurance doesn’t only cover accidents but also covers losses caused by theft and natural disasters. When you know your car is covered under insurance, you will have peace of mind.
The premiums you pay towards your car insurance policy can be costly and you may feel it is heavy on your pocket. But you cannot stop buying car insurance because it is costly for you. It is illegal to own a car and not have a car insurance policy for it. But you can reduce the cost of a car insurance premium when you know the factors influencing the premium of your policy.
What are the Factors that Influence Your Car Insurance Premium?
When you buy car insurance, the first thing you will look for is the cover and the premium to be paid. If the premium is costlier then you may feel the prick. You can minimize the car insurance premium while still keeping the benefits and coverage the same. To do so you should know the factors influencing your car insurance premium. Below are the factors that influence your car insurance premium –
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Car Ownership – In India, the car owner’s driving record determines the premium of car insurance. With a good driving record, you can enjoy lowering your car insurance premium. Women are considered safe drivers and hence they will pay a lesser premium as compared to men. A married Indian will pay a lesser premium as compared to a single Indian as the former are considered safe and responsible drivers. Indians below the age of 25 will pay the highest premium and Indians between 50 to 65years of age will pay the least premium.
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Frequency of claims – When you do not make any claims in the last year’s annual car insurance policy, the insurer will provide a special discount on the premium the following year. This is also known as the No Claim Bonus (NCB). The more claims you make this year, the premium gets costlier the following year.
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Insured declared value – Insured Declared Value also known as IDV is the amount that signifies the current market value of your car. The insurance provider fixes the IDV for your car. This value is arrived after deducting the depreciation value from the current price estimation of your car. Every passing year the IDV of your car decreases as the value depreciates every year and so does the premium of the policy reduces. Lower is the car’s IDV, lower will be the car insurance premium.
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Safety features – If your car has safety features like an anti-theft system you may have to pay a lesser premium as compared to car owners who do not have safety features in their car. Safety features that account for the car’s premium value include an efficient car lock, Car alarms, GPS tracker, and many more anti-theft systems. These are needed for the safety of your car more than for lowering the premium of car insurance.
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The Make and model of the car – Sports cars will have a higher premium as they are risky cars. Slower and standard cars have lesser premiums. Cars that run on CNG or gas have to pay higher premiums. And premium goes on increasing as the cars’ cubic capacity increases. So the class of the car and its model determine the premium of the car.
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Coverage opted – The comprehensive car insurance will have higher premiums. The third-party insurance will also increase the premium but it is mandatory. The add-ons to the car insurance policy will increase the premium amount. Add-ons include the cost of vehicle towing in case of a breakdown, zero-depreciation cover, increased third-party liability, protection of NCB benefits, and many more. All these may increase the car insurance premium but they may be necessary based on your needs.
Summing up
Looking at these 6 factors you may now know how to lower your car insurance premium. You may want to lower your premium but never compromise on the features and covers that are needed for your car. Also, read the policy wording thoroughly and carefully to understand the policy and coverage better. Make better choices and buy the most suitable car insurance with the necessary add-ons.
Drive safe
