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Understanding Car Insurance Premiums for SUVs and Sedans

By Juhi Walia
17 August 2022, 1:53 PM

The automobile sector in the country has introduced a wide range of options over the years, ranging from luxurious sedans to compact SUVs with varying styles, engine capacity, and other features. While both SUVs and sedans have their own perks, the owner can decide on the right type of car depending on their budget, style, and requirements.

Insuring your car is mandatory to drive legally on the roads in India. However, when buying car insurance, several factors affect the premium price. In general, SUVs have higher premiums than sedans as they are priced higher and are riskier to insure. Their bulky weight and size make them more challenging to handle on roads. Moreover, SUVs have higher repair and maintenance costs than sedans.

Today, we discuss the car insurance premium prices for SUVs and sedans and a few factors influencing these costs.

Factors Affecting Car Insurance Premiums for SUVs and Sedans

Below, we talk about important factors influencing the insurance premium for SUVs and sedans.

Model of the Car

The most important factor influencing your motor insurance premium is your four-wheeler model. The type of car you are buying, whether sedan or SUV, greatly impacts the premium you need to pay for coverage. If you buy an expensive, luxurious sedan, its IDV is higher, and so is the insurance premium.

However, if you are planning to purchase an economical SUV, its IDV will be lesser, resulting in a lower insurance premium. The model of your SUV or sedan and its price ultimately influence your premium amount.

Production Year

Another critical factor considered during car insurance premium calculation is the vehicle’s age. The year of production of the car gives information about its age.

With age, the car’s wear and tear and depreciation increase, thus lowering its market value. Old cars have cheaper insurance due to lesser market value, while the insurance premium for new cars is higher as their market price is high.

Type of Engine

The engine type also has an influence on premium amounts for sedans and SUVs. Petrol cars are generally cheaper compared to diesel models. This means sedans and SUVs having a petrol engine would have a lower premium than diesel engine models.

On the other hand, a four-wheeler running on LPG or CNG is more expensive, and you may have to pay a higher insurance premium to cover it. Your premium can also increase if you opt to add an LPG or CNG kit to the car.

Engine Capacity

The higher the capacity of the engine, the higher the premium.

A vehicle with a higher engine capacity produces a bigger output making it more vulnerable to accidents, so the premium price is also high. As SUVs and sedans generally have a higher engine capacity than hatchback cars, their insurance premiums are more expensive.

Type of Coverage

The premium paid for insuring your SUV or sedan also depends on the type of coverage you choose. Third-party car insurance is, for example, cheaper than a comprehensive policy. While third-party coverage only protects against damage caused to third-party property or injuries/death of people, a comprehensive insurance policy also covers the own damages of the policyholder apart from third-party liabilities.

As comprehensive four-wheeler insurance plans offer wider coverage and better benefits, the premium for such policies is higher than that for third-party policies. You can also add extra protection in the form of add-ons to comprehensive car insurance by paying an additional premium.


The place where your car was purchased also affects the premium for your sedan or SUV insurance. Each location in the country has a different risk assigned to it based on the number of vehicles and accidents occurring in the area.

If the vehicle is registered in a location with a higher risk of accident, you can expect to pay a higher premium for insuring it.

Insured Declared Value (IDV)

This is the maximum value of the vehicle an insurance company pays in case of theft or total loss of an insured car. IDV in car insurance influences the premium amount for sedans and SUVs.

The higher the IDV of the vehicle, the higher premium you need to pay and vice versa.

Final Thoughts

Several factors determine the insurance premium for your four-wheeler, whether you are buying a sedan or SUV. Make sure you consider these factors before selecting your vehicle to get an idea of the premium you will need to pay.

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1. What factors affect the insurance premium for SUVs and sedans?

Some of the most important factors influencing the insurance premium for these cars include the make and model, the location, the engine type and capacity, the type of coverage selected, and the insured declared value of the vehicle.

2. Which car has a higher premium, SUV or sedan?

SUVs generally have a higher insurance premium than sedans as they are more vulnerable to accidents and have costlier repairs and maintenance. However, some SUV models can have cheaper insurance premiums than sedans.

3. Should you buy a third-party or comprehensive policy for your sedan or SUV?

Whether you are purchasing a sedan or SUV, a comprehensive insurance policy is a better choice for new cars as it offers more coverage and benefits and saves you from bearing any costs of repairs in any unforeseen event. If the market value of an old car is not so high, it can be covered under a third-party policy.

4. Are SUVs the most expensive to insure?

SUVs have a bulky build and expensive parts, which is why they are more costly to insure than sedans and other cars. However, the premium can vary depending on the model, age, engine type, and other factors.

5. Do older cars have a lower insurance premium?

Yes, older cars have a cheaper insurance premium because of their lower market value. As cars age, their wear and tear increase and the market value decreases, reducing their payouts in accidents and hence the premium amount.

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