India: Automobile Related Factors Affecting Your Car Insurance Premium

In India, there are numerous factors that are affecting your car insurance premium. Apart from the basic factors such as age, profession, credit score and location, there are many more related to your car which can affect the premium. Just have a look at it.

  • Engine Capacity

A comprehensive insurance policy consists of two elements – mandatory third party liability coverage and own damage coverage. The premium calculation for the third party cover is largely based on the cubic capacity of your car’s engine. The higher the CC of the car, the more insurance premium you will end up paying.

  • Age of the Car

The insurance premium of the own damage cover is computed based on the Insured Declared Value or IDV of the car. This value is fixed depending on the manufacturer’s listed selling price minus the depreciation value of the car. So, the more the age of the car, the higher the rate of depreciation and this means the IDV can get lower. So an old car can attract a lower IDV which directly translates to a lower insurance premium than a relatively newer car.

  • Make and Model of the Car

Other than the IDV the make and the model of the car is also important to determine the insurance premium rate. A high-end car can attract a high insurance premium, than the others. Also, certain car models attract more attention and can be a good target for theft. This can cause the insurance premium to increase.

  • Safety Features

If your car is equipped with security devices like gear lock, airbags, GPS and handle lock, then the likelihood of it getting stolen is lesser. Hence this translates into a benefit for you and insurance providers will consider this to lower your insurance rate. It can fetch you a discount on the own damage cover premium.

  • Accessories and Modification

In case your car has accessories and modifications, it will not be covered under your general insurance plans. You need to intimate this to your car dealer and add it to the total price of your vehicle. This will fetch you a high IDV and therefore higher insurance premium.

  1. Other Factors
  • Kind of Insurance

The premium of your insurance policy depends on the type of coverage you opt for. If you opt for third party liability only coverage, then your premium will be less as opposed to a comprehensive coverage that includes own damage cover as well. Also if you opt for add-on coverages like NIL Depreciation or Engine Protection, then you will be charged additional premium accordingly.

  • Driving History

Your driving record will also be taken into account– have you been in accidents before, received penalties or made previous insurance claims? If you don’t have a good driving history, it can create blemishes on your record, and the insurance premium can increase.

  • Voluntary Deductibles

The deductible amount that you choose to pay in the event of any claim also plays a significant factor that determines your insurance premium. Generally, choosing a higher deductible can fetch you more discounts on the online car insurance premium. However, be sure to choose an amount that is affordable to you.

Tips to Buy an Affordable Insurance Policy

  • Make sure you opt for benefits that are important for you and your vehicle. Take a closer look at the above factors and see how you can opt for discounts on car insurance premium
  • Take help of insurance comparison portals to research different policies and finalize the right one suited for your needs and preferences
  • Optimize your coverage and choose the right type of coverage to avoid out of pocket payments

Compare different insurance policies, select the right coverage and choose the best plan that suits your requirements, budget and lifestyle.

If you have any questions, please ask below!