6 things that affect Your Car Insurance Premium
6 things that affect Your Car Insurance Premium 27th April 2021
Accidents are uncertain and can come uninvited, leaving behind an inevitable financial loss. Thanks to tools like car insurance, it becomes easier for us to safeguard our vehicle from such unforeseen circumstances. Car insurance covers repairs, damages, third-party liabilities, and other kinds of coverages related to your vehicles.
While multiple car insurance companies in the market will promise you premium services, you need to understand the factors that weigh-in for an ideal product. Yes, numerous companies offer multiple benefits; but not all services might be useful for your car. Further, availing of such benefits could cost you extra premium. Therefore, you must understand the factors that need to be weighed before buying a private car insurance in India.
Following are some of those factors:
1. Type of cover:
There are mainly two types of car insurance namely comprehensive plans and third-party insurance. In comprehensive plans, both, the insured vehicles’ damages, repairs, or anything else that may arise due to any unforeseen circumstances and also the third party liabilities will be covered. In third-party insurance, only the third-party liabilities and damages will be covered. Thus, a comprehensive plan for private car insurance in India attracts more insurance premium as compared to third-party insurance.
2. Safety features present in your vehicle:
What the insurers look for is the safety mechanism installed in your car. Safety equipment like air-bag, GPS, alarms, central lock, etc. If you have installed a suitable safety mechanism, your premium rates will be less and vice versa. The rationale behind this is that the insurers believe the safer the car, the lesser the chances of mishap. A good safety toolkit installed will be greatly beneficial for you in terms of buying an insurance plan.
3. Geographical orientation:
The kind of terrain you reside in has a major impact on your premium. If you live in risky terrain where there are more chances of accidents, your premium will be high because of the attached risk and lower in case of lower risk.
4. Type of powertrain:
If your car has a diesel engine, then the premium will be high because of the higher prices of diesel vehicles. The factor of Insured Declared Value comes into play here. It means the pricing of your car in the market during the purchase of your car. You will notice that the premium segment cars have higher premiums than their less luxurious counterparts, which might be due to the same principle.
5. Deductibles and Limits:
Your policy’s limit is the maximum amount paid towards the covered loss against your premium amount. Typically, individual coverage has its own limit, allowing you to customize it according to your needs. Further, the more coverage you opt, the more premium you pay.
6. Your Profession:
Interestingly, your profession also has a part to play in your insurance premium. If you are involved in a profession that requires regular usage of your vehicle, chances are that you will have to pay a higher premium. The reason being that here the vehicle depreciates at a faster rate when compared to the other cars covered under a policy.
It doesn’t matter whether you buy car insurance online or offline. What matters is that you look into these factors before purchasing it. Remember, the factors mentioned above are some primary reasons that affect your premium. There can be other numerous factors and not all of them can be estimated. Thus, it is always in your favor to buy insurance only after comparing the benefits from a host of insurers available in the market.