Key Factors to Determine Car Insurance Premium

A car or a four wheeler is used as an asset for everyone. When we buy a car it is quite a heavy investment, so it is important to insure it against all types unforeseen and mishap situation. If you are thinking to buy a car, it only make sense to know about it in as much detail as possible. Most people decide to buy car insurance policy based solely on the premium amount. Although, there is no guaranty on this that a cheap premium will give you a full coverage. So, it is important to know what is the least premium you need to pay in order to get that optimal cover.

Though, having a car insurance is mandatory in India, there are a large number of people who still skip to have their car insured because of the high premium. There are many ways of calculating car insurance premium and by comparing the different policies online offered by different companies like Bajaj Alliance car insurance, ICICI Lombard car insurance, TATA AIG car insurance and so on.You can chose the most affordable policy that offers very less premium.

While you purchasing a car insurance policy certain key factors plays a crucial role in determining car insurance premium value. These factors include

Car model, make and variant-This is quite obvious and straightforward that the higher end cars such as Mercedes and BMW are insured at a higher price as compared to the lower-segment or budget vehicles such Tata Indica or Hyundai Santro. Similarly, SUVs and MUVs are insured at a significantly higher premium compared to a family car or a sedan.

Year of manufacture-Another key factor that plays an important role in the premium value determination is the manufacturing date and age of your four wheeler or car. As compared to the new car the Insured Declared Value (IDV) is lower for older cars. Lower IDV translates into lower premium amounts and vice versa.

Fuel type-The car insurance premium value is also determined by different fuel types. For e.g. a car fitted with CNG system/kit, you will have to pay a higher premium as compared to petrol or diesel operating car.

Age of the owner- Insurance companies perceive that insured individuals below the age of 25 are at a higher probability to be involved in an accident. Keeping this mind, if you are in 18 – 25 age bracket, you are likely to pay higher premium amount.

Geographic location of the insured- As the density of traffic in urban areas is higher, cars insured this geo location have a slightly higher premium as compared to sub-urban or rural areas.

Discounts- Many professionals such as doctors, defense personnel, and government employees to name a few are eligible to avail further discounts on their premium amount.

Anti-theft discount- If your vehicle is fitted with an anti-theft device that is approved by ARAI, you are eligible to get an additional 2.5% discount on your premium.

Voluntary deductible-It is the minimum amount declared by you to bear during the time of claim. Your premium can be lower if you opt for higher deductible.

No Claim Bonus (NCB) –No Claim Bonus is a discount that is offered to the insured for every claim-free year. The NCB is an accrued discount and depending on the track record of your claim the discount varies from 10% to 50%. At the end of 4 year the discount can go up to 40-50% for every substantial year. Your NCB can be migrated to another car or policy by a different insurance provider. NCB is attributed to the owner and not the vehicle.

Prior to buying a car insurance policy it is important to calculate car premium because.•The insured get well information about the market and all the players involved in the sector•Using a car insurance calculator makes the overall process simple and convenient for you. •You can compare premium rates, plan feature, coverage and insurance companies and opt for the best insurance plan.