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Is Car Insurance Expensive for Sedans?

By Vikas Chandra Das
21 July 2022, 11:46 AM

Nice looks, lesser elbowing, more leg space, and, of course, ample fat boot space. It is what comes to mind when you think of a sedan. They're beautiful and can cost a tonne if you've got a taste for luxury. But what about the insurance of these beauties? Does that cost a blast, too? Yes, if you equate it to a low cubic capacity (CC) hatchback, and no if you compare it to a high-end SUV.

It must be noted while purchasing a car insurance policy that the policy costs and add-ons vary with the car you own. It is essential to buy adequate add-ons as the cost of maintaining a sedan is much higher than any hatchback or SUV in some cases. It also means that you might have to pay higher premiums for your sedan. 

Read on to find out the various factors that can affect the premium rate for your sedan. Being well aware of these factors will allow you to make well-informed decisions while choosing a car insurance policy for your sedan.

What are the Things that can Determine the Premium for Your Sedan?

The factors may differ from one company to another but given below are some of the significant aspects considered.

  • Model and make of your sedan: Suppose your sedan has an engine with a lower cubic capacity. In that case, it will cost less than the one with a higher cubic capacity. The make and model of your sedan will also be taken into account. Suppose you are one of those who consider their car to be a canvas. In that case, the extra aesthetic changes may have an impact on the insurance premium.
  • Your location: Driving in Mumbai, where cars almost hit each other in heavy traffic, is very different from driving in a small town with fewer cars and fewer road accidents, for that matter. Sedans registered in metros have a higher premium than those registered in Tier 2 and Tier 3 cities.
  • Usage of the car (private or commercial): The cost of insuring private cars and commercial cars is different, so the purpose for which your sedan is used also matters. If you're earning money from your sedan by using it as a commercial vehicle, then be prepared to spend extra money to make sure it is insured.
  • The efficiency of the driver ( Are you a good driver or not?): Often, the answer would be yes! But the auto insurer won't take your word for it. What's going to work for you is the record of your claims. Suppose you have not raised any claims during your coverage span. In that case, your insurer will give you a No Claim Bonus (discount) when renewing the car insurance policy on your sedan. Bad driving habits may lead to higher premiums.
  • Condition of your sedan: The condition of your sedan is linked with two important concepts: Depreciation and Insured Declared Value (IDV). These two principles are interlinked. Depreciation can be defined as a decline in the value of the asset due to normal wear and tear over a period of time. And, IDV can be understood as the estimated market value of the vehicle. Typically any car in bad shape is going to have more depreciation and less IDV. This means that it would cost less to insure an old vehicle and more to insure a new car.
  • The type of policy you buy: You may choose from the following three kinds of insurance policies for your sedan-
    • Comprehensive Policy
    • Pay as you drive Policy
    • Third-party Liability Policy

The cost of the premium depends upon the type of policy you choose. A third-party car insurance policy costs much less than a comprehensive policy. Still, a comprehensive car insurance policy will provide maximum protection to your sedan. Suppose you purchase pay as you drive insurance policy. In that case, the cost of the premium will depend on the number of kilometers you go.

  • The kind of add-ons you choose: Suppose you improve the coverage of your sedan with add-ons such as Zero Depreciation Car Insurance, Invoice Safety, Passenger Cover, etc. In that case, it will cost you a higher premium. It would be best to learn about invoice cover and zero depreciation car insurance, and other add-ons to understand their advantages. Add-ons are helpful, but it is recommended that you only go to those that meet your specifications. For example, a Passenger Cover isn't going to be productive if you drive alone in your car.

Is Insuring Sedans More Expensive than Insuring Other Categories?

Whether insuring a sedan can be considered expensive or not entirely depends on the frame of reference being used.

If you compare it with SUVs, it might not appear to be that expensive. In fact, in some cases, insuring an SUV may be costlier. But if you compare it with insuring hatchbacks, it is much more expensive. The main reason for such a vast difference is that sedans are a luxury cars category, raising the cost of repairing and maintaining them. Just like Naman who recently purchased a Maruti Suzuki Ciaz, which is a sedan hence had to pay a higher premium as compared to his brother Namit, who purchased a hatchback hence is paying a lesser premium for that. 

Conclusion with key takeaways

You should purchase a comprehensive car insurance policy for your sedan to ensure maximum coverage. Before buying, make sure you read and appreciate the inclusions and exclusions of the policy. It is also important to note that factors like condition, location, make, model, add-ons, the type of policy, intended usage, and your claims record will all play a role in determining the premium cost. 

In most cases, insuring a sedan will cost higher than ensuring any hatchback. Whether costly or not, be sure to insure your sedan, comply with the law and protect your financial interests in the event of an unfortunate event such as an accident.

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