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Common Factors That Affect Policy Cost for Reliance Automobile Insurance

By Juhi Walia
23 September 2022, 11:15 AM

A car insurance premium is the sum of money you spend to protect your four-wheeler against any legal or financial obligation arising from unforeseen incidents.

Automobile insurance policies offered by Reliance General Insurance are third-party, own damage and comprehensive car insurance. The premium amount generally depends on the coverage the particular Reliance car insurance policy provides.

When understanding the cost of automobile insurance, the guiding principle revolves around risk to the insurer. The factors that determine the risk to the insurer are:

  • The owner's background
  • Type and make of the vehicle
  • Geographic location, etc.

Apart from the coverage and benefits, many other factors affect the cost of car insurance. It is essential to know about the factors impacting the insurance policy cost to obtain car insurance with sufficient coverage at a reasonable price.

For Reliance car insurance, here is how the risks and other relevant factors weigh on the cost policy.

So, What are the Factors That Impact Reliance Automobile Insurance Premium?

When buying or renewing your policy, let us look at a few critical factors that affect your automobile car insurance premium:

Vehicle Make, Model, Variant

The cost of protecting a luxury SUV is undoubtedly higher than that for a hatchback. The premium amount for car insurance depends on the vehicle's fundamentals and specifics, such as the following:

  •  Manufacturer
  •  Model
  • Version or year of release 

These characteristics directly influence the cost of automobile insurance you pay with Reliance.

Car's Age

The age of the vehicle brings up the concept of depreciation on the Insured Declared Value (IDV). Depreciation refers to the loss in the vehicle's value over time due to wear and tear.

IDV, on the other hand, denotes the vehicle's current worth in the market. Depreciation rises with time, resulting in a lower IDV as the car ages.

In simple words, insuring an old automobile costs less than protecting a new car.

Reliance offers an add-on aimed at reducing depreciation on cover for a slight increase in the premium.

Type and Capacity of the Engine

The cubic capacity of the car plays a vital role in deciding the insurance cost. This is because the damage factor is calculated based on the car's cubic capacity and registered RTO.

Reliance third-party car insurance premium is computed solely based on the car's engine power, and the amount to be paid is directly proportional to the same; the premium increases with greater engine capacity and vice versa.

The type of fuel your car uses also impacts the insurance price. The premium amounts are different for petrol, diesel, and CNG engines. You might pay a higher premium for your vehicle if it runs on diesel because these vehicles are expensive and have a higher IDV.

Personal Factors

The cost of your Reliance car insurance policy can also vary due to some personal factors, which have been outlined below: 

  • The driver's age can either increase or lower the insurance cost. For example, people aged 50-65 pay the least premium, while those under 25 may have to pay more.
  • The gender of the insurance policy's applicant is another factor that impacts the cost of Reliance car insurance policy. For example, women are charged a lesser premium than men as they are considered safer drivers.


The cost of an automobile insurance plan is also decided based on the coverage you get. For example, if you opt for a third-party liability policy for your vehicle, you only pay a small premium.

However, a Reliance comprehensive car insurance policy offers additional benefits apart from third-party liability cover requires more premium.

Location of the Car

Buying insurance protection for your car would cost more in a metropolis than getting it insured in tier 2 or 3 cities. 

That is because four-wheelers are believed to be more at risk of damage or loss in an urban setting due to several reasons, such as:

  • The prevalent crime rate
  • Congestion
  • Traffic conditions

Geographic locations are classified into various zones based on:

  • The number of vehicles
  • Population
  • City accident risk

Your insurance premium can vary depending on the zone in which the vehicle is registered.

Add-on Covers

Car insurance add-ons are optional covers that extend your car insurance policy's protection. You can add these extra benefits to your policy by paying an additional amount at the time of purchase or renewal. 

Some of the most popular examples of add-on covers are: 

  • Passenger cover
  • Zero depreciation
  • Roadside assistance

Since you pay an extra price to obtain this additional coverage, your insurance premium can vary depending on the number of add-ons you choose. 

Your premium amount is directly proportional to the number of add-ons you want; the higher your add-ons, the higher the premium amount and vice versa. 

This means that you should only select the add-on covers needed to keep your premium reasonable.

Final Thoughts

Though some factors can raise the car insurance cost, paying attention to them can cut your four-wheeler policy premium.

The cost and premiums for automobile insurance have undergone substantial changes in recent years, especially since the rise of online comparison platforms like Paytm Insurance, with consumers often spoilt for choices and the cost differential often being laser-thin as against the value they add.

We have discussed some critical factors that might impact your insurance price; learning about them should help you select the best policy that fits your needs and budget.

Read more -


1. How does Reliance set its car insurance premium rates?

It considers these factors before deciding the car insurance premium rates.

  • Make, model and variant of vehicle, 
  • The age add-ons you opt for
  • Policy coverage

2. Is the insurance cost for older vehicles lower?

In general, most older cars are less expensive to insure. This is due to the depreciation wiping off the car's value with time. Less value means less IDV and less premium liability.

3. Does the type of car affect Reliance automobile insurance costs?

The car you possess can significantly affect the premium you pay for your four-wheeler insurance. The higher the vehicle's cost, the higher your policy premium. Hatchbacks can be cheaper to insure than sedans and SUVs.

Additional factors such as the ones mentioned below also directly impact the car cost: 

  • The make and model 
  • The engine type and its cubic capacity 

4. Will your insurance get cheaper once the car is paid off?

Paying off the car loan does not reduce your insurance costs. However, once you own it, you can enjoy more freedom regarding the coverage you need, resulting in cost savings with your premium amount.

5. How can I reduce my Reliance car insurance cost?

Paying attention to the factors affecting automobile insurance costs can help make it more affordable.

For example, you can save money by only choosing the add-on covers that matter to you. You can also avoid making small claims to retain the no-claim bonus, which saves you on renewal.

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