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Factors That Affect Your Car Insurance Premium Quotes

By Juhi Walia
22 September 2022, 5:29 PM

Having car insurance is a must in this day and age. This is because, with the increasing number of vehicles on the road, the chances of accidents are high, causing financial concerns for the ones at the receiving end. A car insurance policy ensures you the financial safety net should there be any mishap involving your insured four-wheeler.

While third-party insurance offers the bare minimum coverage, a comprehensive plan provides better protection. That said, you should also check whether you have all the necessary covers on your car insurance policy.

The premiums for such insurance plans can be high and make it challenging for some to pay on time. To protect yourself from this, you should know the main factors that affect your car insurance premium. These have been mentioned below:

1. Coverage Types

The type of coverage you decide for your car insurance policy determines your premium amount. A comprehensive policy covers both third-party liabilities and own damages, so its premium is higher than that of a standalone own damage and third-party policy. These two are not comprehensive in nature, so their premiums are lower. That said, you are not 100% secure either. So, choosing a comprehensive policy at the best price is vital.

 2. Geographical Location of the Insurance

This is one of the factors that is directly proportional to the rate of the premium. More traffic on the road results in more road mishaps and other unwanted incidents. Hence the geographical area is crucial when determining the premium. 

For example, higher insurance premium rates are levied in metro cities, whereas lower premium rates are levied in less-populated places. If possible, you could try a different location for buying your insurance if you are not sure about living in the metro area for a long time.

 3. Personal Factors

Demographic factors such as the ones mentioned below help determine the quality of your driving and are therefore directly linked with the premium you pay:

  • Age group
  • Gender
  • Marital status

 Let us explore these factors in greater detail:

  • Gender: Female drivers are charged less premium than male drivers as the former lot is considered safer.
  • Marital Status: A married person who buys a car for family purposes is charged less premium than one who is single. The open theory about this is that a married person is prone to drive safer with his family in the picture as compared to single people.
  • Age: Age is another factor considered to determine your premium prices. People aged 25 pay the highest premium as they are the new drivers. People between the ages of 50 to 65 years are charged the least premium because it is assumed that they have been on the road for many years and are safer by comparison.

4. Engine Coverage

The fuel your car engine uses is another factor that will determine the cost of your premium. If your vehicle has a diesel engine, it will have a higher car insurance premium. This is because the cars that run on diesel are expensive. So, their Insured Declared Value is high. What you can do is get a CNG engine car. This way, you will pay a lower premium while doing your bit for the environment.

 5. Security System

An anti-theft device installed in your vehicle will result in almost zero claims on car damages and losses. So, if you have a security system installed in your car, the premium rate will be lower than the cars with none. It is also necessary to note that this discount does not apply to third-party liability insurance.

 6. Customisation of Car Insurance Plan

This is one of the major factors determining the fluctuations in your premium price. You need certain add-on covers for your vehicle, and you cannot compromise on them. Add those to your base insurance policy and check the premium rates.

If you feel there is still some wiggle room for more covers for your insurance, you can add them. But before finalising your car insurance plan, make sure to add and reduce the necessities and check the premium rates. This will allow you to make a more informed decision. 

In a Nutshell

Several factors allow you to change the premium prices on your car insurance policy. Make sure to strike a balance between each of these factors so that you can gain the maximum out of your car insurance by paying the premium price that is affordable to you.

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1. Can I get help from insurance companies to customise plans for me?

Yes. An insurance company can provide you with agents who can compare and help to customise your car insurance plans.

2. Will the premium prices quoted at the beginning of the application term change on renewal?

The premium prices will change at the end of your policy’s tenure as the IDV will fall.

3. How to choose beneficial add-ons or policies for my car?

For this, you need to check on the usage of your car and the roads it is primarily driven on. If you locally drive your vehicle more, the covers won’t be needed to insure you during your road trips.

4. Where can I calculate the premium quote on my policy with different covers?

You can go to the online portal of your insurance provider and calculate the premium on your policy. You can add and change various covers and add-ons to get different rates for combinations.

5. Do I get a discount if I use the CNG engine?

No. You do not get any additional discount by using a CNG engine. But, notably, the premium charged to a CNG engine is lesser than that of a diesel engine.

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