Factors That Affect Car Insurance Premium

As mandated by law, buying Car insurance is compulsory for every car owner in India. The plan starts from the day the car is bought. It provides safety to the 3rd parties and also to the car owner in case of accidental damage or unforeseen mishaps. Car insurance comes with an annual premium. So, let us check out the essential factors which influence the car insurance premium. These factors must be kept in mind while getting an online car insurance quote.

Coverage Amount

The cost of car insurance plans increases if the car owner seeks for more insurance amount. The premium amount also depends on the type of car insurance cover, namely,

• Private car insurance plan

This is the first coverage every owner takes after the purchase of the vehicle. This coverage can be classified as

• Comprehensive policy- This policy covers costs related to accidental damage. The insurance company pays the insured in case there is physical damage to the car as well as injury or death of the of the other driver involved in the accident. It also covers the car owner for the expenses related to such issues. As this is broad coverage of both self and 3rd party, the premium amount is higher.
• 3rd party liability- This type of

car insurance plans cover only the damage caused to the other or 3rd party due to the accident. As this policy has limited scope, the premium amount is also less.

• Commercial car insurance plans

This policy is especially for vehicles which are engaged in commercial activities, like trucks, the app-cabs, and taxis. Besides physical loss and damage, these vehicles are exposed to more financial losses, hence, the premium amount for this insurance type is more than that of the private car insurance.

Opting for a voluntary deductible

This refers to the expenses which the insured wants to pay in case of any physical damage or loss. If the policyholder opts for the more voluntary deductible, the premium amount will be lower. If the car owners agree to pay only the compulsory deductible, then the car insurance quote from the insurance company will be higher.

Add-on plans

When checking car insurance online the car owner will come across several add- on features. These generally include zero depreciation coverage, emergency assistance, cost of consumables. The more features the car insurance covers, the higher will be the premium.

Driving history

The driving history is a critical component of consideration when calculating the annual premium. The car insurance quote from an insurance company will be higher if the number of accidents, traffic signal breach, thefts has been more. Last but not least; the place where the car owner lives also plays a vital role in deciding the premium (for example, densely populated areas are more prone to accidents).

Car details

The car owner needs to include vehicle size and age to check the premium for car insurance online; the larger and older cars need to pay a higher premium than smaller or newer versions.

So, given all these pivotal factors at the forefront, decide on buying your car insurance premium tactfully.

Experienced finance professional specializing in insurance and investments