Different cars have varying insurance needs. The car insurance policy which you thus apply for also depends on factors such as:
- Car model
- Age of the car
- Driver's age
- Experience with driving
Generally, SUVs come under the higher end of the price spectrum. Hence, the IDVs of SUVs are more compared to other cars. The high IDVs result in higher insurance premiums, which makes car insurance policies for SUVs expensive. Also, SUVs' repair costs are higher than that of other cars.
However, some SUV models are cheaper compared to other models. The cost of insurance for these models is, therefore, less than that for others.
Hence, before buying a policy, you must compare car insurance policies and decide which one to buy. Let's look at the factors that influence car insurance premiums.
Factors Affecting Car Insurance Premiums
If you plan to buy an SUV or a sedan, you must be aware of the factors affecting your car insurance policy. Here are some important factors that must consider when buying car insurance.
Model of Your Car
The car's make and model is one of the most crucial factors determining your insurance premiums. Hence, you need to disclose the model of your vehicle to your insurance company. If you have not purchased a car yet, you should research the cost of insurance premiums with respect to the various models before buying one.
The make of the car also plays an essential role as it is difficult to repair some car parts in some specific vehicles. Hence, the cost of repair goes up significantly. The company decides on the premium amount based on both the make and model, as both factors have a significant impact.
Driving Record
The insurance company will check your driving record before calculating the premium amount if you are planning to buy a new car insurance policy.
You are labelled a low-risk driver if you have a clean record, i.e., no past accidents, etc. Nonetheless, if you've been involved in an accident or been fined a speeding ticket, the associated risk factor increases as your driving score decreases drastically.
Insurance premiums are generally cheaper for low-risk drivers than for high-risk drivers. Therefore, it is essential to drive safely and maintain a healthy record. However, if you have a minor issue with your driving record, compare policies to figure out who's giving you a better deal.
The Engine Type
The insurance company checks the quality and specifications of the engine before deciding on the premium amount. Diesel engines attract higher premiums as their repair costs are higher. Even the premiums of CNG cars are on the higher side.
However, the premiums on petrol cars are pretty cheap. The price might slightly vary if you have an expensive petrol car.
Location
The location where you will be driving your car also plays a significant role. For instance, if you stay in a metro, the cost of your car insurance policy premiums will be higher as compared to other tier 2 cities. Also, if your locality has a high crime rate, the cost of insurance premiums will go up.
Crime rates and the frequency of accidents play a critical role in deciding the cost of premiums. If you are planning to move to a safer area, you should delay the purchase for the time being.
Add-ons
Car insurance add-ons ensure additional coverage and protect your SUV or sedan from various damages. Before you pay for your car insurance policy premiums, read all the policy documents carefully. Post that, if you feel that any particular protection against damage is not available, you can get an add-on for the same.
However, add-ons are not free of cost. Hence, you should consider your budget before you ask the provider to bundle any add-ons with your package.
Coverage
Coverage is the primary deciding factor for the cost of car insurance policy premiums. If you have an old car and you are looking for minimum coverage, the cost of premiums will be low. However, if your car has not aged yet, and you are looking for a comprehensive insurance policy, the cost of your premiums will shoot up.
Therefore, before buying the policy, you must decide the coverage you want for your SUV or sedan. Also, if you are purchasing a car for occasional use, there is no point in paying high premiums.
Deductibles
Deductibles are the amount the policyholder pays out of their pocket before the insurance money comes in. If you have the monetary bandwidth to pay high deductibles, the cost of your car insurance policy premiums will go down considerably.
However, in case of damages, the cost of repairs will rise significantly. In such a case, if you pay lower premiums, the cost of deductibles will be pretty high.
Hence, the policyholder will be at the receiving end of the losses. No fixed rule defines deductibles. It depends on your financial power and willingness to pay when an accident happens. If your driving behaviour is in your favour, you will save much money in the long run with higher deductibles.
The Vehicle Type
The type of vehicle you own also affects the car insurance policy rates. SUVs and sedans are considered in the same bracket when the insurance provider calculates the insurance premiums. However, some providers might choose to bundle them separately, as insuring an SUV is more expensive than insuring a sedan.
SUVs are prone to accidents, and repairing them amounts to an increased financial burden on you. Hence, the premium on SUVs is more compared to sedans. If you want to reduce the cost of your insurance premiums, you can buy a sedan instead of an SUV if you are still in your purchase consideration phase.
Key Takeaways
All the factors stated above play a significant role in deciding the cost of car insurance policy premiums. Insurance companies also consider the Insured Declared Value (IDV) of the car for calculating the premium amounts.
Before you choose an SUV or a sedan, make sure to compare their insurance prices. Once you get a good deal, you can go ahead with the purchase.
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