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.
Coverage
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.
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