(Newswire.net — September 11, 2020) — Car insurance premiums are affected by multiple factors like the choice of insurance provider, type of policy, offline or online mode etc. The factors related to the car itself like make & model, age of the car etc. are also factored in when deciding the premium you pay on your car insurance.
Here are 10 factors which affect your car insurance premium rate :
- Online v/s Offline Insurance Policy –
- Offline- This includes buying insurance from the registered office of your chosen insurance provider or through an agent. This also includes the insurance offered by your car dealer. These are standard policies which offer less choice, high premiums and no discounts.
- Online – If you want an extensive insurance cover at a low premium rate , buying car insurance online is the better choice as it gives you the autonomy to compare rates, avail discounts and additional bonuses and choose the insurance cover best suited to your needs. It is a convenient, transparent and safe process.
- Third Party Insurance v/s Comprehensive Insurance : There are 2 types of auto/motor insurance :
- Third Party Car Insurance – This is the minimum insurance cover with a low premium and is legally required by every vehicle owner in India. This insurance only covers liability in case of accident leading to damage to a Third Party.
- Comprehensive Car Insurance – This insurance covers Own Damage (OD) along with the basic third party liability. With a comprehensive cover, the premium is higher with additional features like add-on covers such as Roadside Assistance, No Claim Bonus etc.
- Credit Score : Your credit score is your performance in terms of repayment of loans and other credits. If there is a delay in repayments or more number of loans, it affects your credit score, thus affecting your rate of premium.
- Bundling Discounts : Bundling discounts on car insurance premiums are available if you have a single insurance provider for all your insurance needs. For Example, Bharti AXA can take care of various insurance requirements from auto/motor insurance to health and travel insurance. Also, if you have more than one car in the household, bundling discounts can help reduce the burden of premium for multiple cars.
- Deductibles : Deductible is the amount paid by the policyholder in case of an accident/claim for repairs etc. There are 2 types of deductibles :
- Compulsory Deductibles decided based on age, sex, cubic capacity of car etc.
- Voluntary Deductibles which are decided by the policyholder at the time of purchase/renewal of policy. If the voluntary deductibles are high, the insurance premium is low.
- Insured Declared Value or IDV : This is the current market value of your vehicle. The IDV is adjusted every year from year of purchase, considering depreciation (wear & tear, age & model of car etc.). The IDV of your car decides the rate of your premium every year.
- No Claim Bonus or NCB : Your No Claim Bonus or NCB is a bonus amount you receive for every accident-free or claim-free year you have. NCB is availed in the form of a reduced premium at the time of renewal of your insurance policy and a good claim free record for multiple years can get the premium reduced to as much as 50% ! NCB is portable so you don’t lose your bonus even when you change your insurance provider on renewal.
- Add-On Covers : Add-Ons are additional coverage offered in comprehensive car insurance policies. These covers make your car insurance more holistic by extending your cover for perks such as roadside assistance, accidental death benefit, zero depreciation cover etc. Each add-on cover is separately purchased and adds to the cost of premium.
- Location and Cubic Capacity : Your geographical location affects the cost of your car insurance premium. Thus, if you reside in a metro city , your premium costs may be higher than if you reside in a semi-urban or small city or town.
The cubic capacity of your engine is also a factor which decides the rate of premium.
- On Time Renewal : Most insurance policies require an annual renewal. If you don’t renew your policy within 30 days from the date of expiry, your insurance can lapse and you can lose your NCB while also being unprotected. Buying a new policy would then mean paying a higher cost of premium.
- SR-22 form: This isn’t a real insurance policy. An sr22 insurance idaho is merely a form that insurance companies fill out to ensure that a high-risk driver carries the bare minimum of coverage. This document also establishes a precedent that the state will be notified if the motorist switches vehicles, cancels or lapses their insurance, or fails to pay their payments.
Thus, renewing your policy on time can help you stay protected at all times. Several insurance providers such as Bharti AXA offer break-in insurance which make sure you don’t lose your NCB if you renew your expired policy within 90 days of expiration.
Choose your car insurance wisely and stay protected on and off the road.