A layman is allured to buy car policy from the player that can offer the least premium. This may be a good reason unless you know how the premium for car is decided. There are many parameters that contributes in arriving at the amount of premium for car insurance. You must analyze all these aspects before deciding upon car insurance policy. Let alone the premium may not be the deciding factor for car policy, you must check many attributes that decide the amount of premium as well. Having said that it will not be wrong to say that the premium of the car may be a subjective term that can be flexible based on many variables and parameters as elaborated in details below.
Theft- Alarms
The anti-theft alarm installed in the car can surely save you multiple bucks. This can be one of the factors that can reduce car insurance premium. Most importantly installing anti-theft alarm can prevent insured’s car from getting stolen. In a way, it provides much needed extra protection to car. Taking this additional care by you for car can help you in saving some cost of premium. A car owner who has installed an anti-theft equipment end up paying less premium amount for his car policy.
Types of Fuels
Nowadays you have a lot of options of fuel that you wish to have in vehicle. You may choose to go for a petrol, diesel car or a CNG. Amount of premium will differ based on the type of fuel you use. The type of fuel can affect the life ofcar. Because of this reason car insurance premium is impacted. Vehicle owner using a certain type of fuel may pay the lesser premium as compared to the other.
Cubic-Capacity
Cubit capacity reflects the engine capacity of vehicle. If car is less than 1500 cc than the expense on the damage may be lesser as compared to the vehicle with higher engine capacity. Price on the premium that you need to pay will differ accordingly.
Insured Declared Value
Insured Declared Value (IDV) is based on the depreciation value ofvehicle. As insured’s car depreciates it’s market value decreases as well, it impacts the premium accordingly. Lower the IDV value of the vehicle lesser will be the price of the premium that you need to pay.
No Claim Bonus (NCB)
NCB is the discount that you can take at the time of policy renewal. It’s a kind of reward granted because of not availing the claim in the previous year. Usually, NCB can go up to 50%. If you are eligible for NCB than definitely, you will end up paying a lesser amount of premium upon the renewal.
Type of Policy
There are usually three kinds of policies that you can choose from. The premium amount will differ based on the type of policy that you may choose. Some of the types of policies that you consider to choose from are as follows
- Third Party Damage
- Own Damage
- Comprehensive Policy
Third party damage has become mandatory for all the vehicles as per the latest amendment by IRDAI. You must take it for the period of at least three years. The premium may be fixed in such kind of plans. However third party damage may not be enough you may have to club it with own damage or comprehensive plan to protect car completely. The rate of premium will differ based on the other types of car policy chosen by you.
Car Insurance Player
The premium amount is also based on the type of insurance player. Some Insurance companies may offer you a different rate of the premium than others. This may be because of their brand value or any other additional reason. You can always choose the insurance company based on the premium they offer as well. Some of the leading insurance players to choose from are mentioned below.
- Bharti Axa
- HDFC ERGO
- ICICI Lombard
- Royal Sundaram
- The Oriental Insurance
- United India Insurance
Add-Ons
There are many add-on covers available with car policy. The amount of premium that you end up paying will be directly proportional to the add-on you have taken. The car insurance company may offer many add-ons. You may select only a few add-ons that you require to minimize the amount of premium.
Voluntary Deductibles
At the time of claims, there are some deductions made as it cannot be covered as part of insurance. You can also choose to take the option of voluntary deductions, so this amount will be automatically deducted from claim without any inspection. Choosing this claim can also definitely reduce the amount of car insurance premium as well. This is because of the fact that you are saving time and some money from motor insurance firm.
Claim History
Claim history can affect the car policy premium as well. If you have exceeded the claims limit than you will end up paying more amount of premium at the time of car policy renewals.
Geography
Location also affects the amount of premium you need to pay for the car policy. If you stay in a metro than the risk of the damage to car is higher. This is due to the ever-increasing traffic and other factors like crime rate etc.
Lapse of Policy
You must renew car insurance policy before its due date. If the gap is more than 90 days than the rate of premium may go higher upon the renewal.
Since you now know what determines the car insurance premium, you can easily select right car policy after comparing the attributes above. To buy car insurance policy online you can visit any insurance web aggregator like PolicyX and select suitable car policy for self.
