(Newswire.net — January 8, 2019) — You pay your car insurance premium every year, but do you know how car insurance companies in India compute the premium cost? What actually goes into the making of a final car insurance quotation? Find it out here…
The overall car insurance premium rate is affected by various factors – some of them rest in your control while others are beyond your control. Have a quick rundown of some of these factors to know how the premium for the best car insurance policy is determined.
1. Your Age and Driving Experience
The age of the driver is one of the crucial factors to determine the cost of the car insurance premium. If you are less than 18 years of age or a new driver with a car license less than a year old, then you are likely to pay 15 to 20% more on your car insurance premium.
The primary reason behind it is that the lack of experience increases the probability of accidents due to the age factor, and it makes you more vulnerable to mishaps and accidents on our city roads.
2. Driving and Claim History
If you have had a tough time on the city roads, got involved in some accidents, violated traffic rules or received any tickets, then eventually you are going to pay for it.
Your car insurance provider will take into consideration your claim history and your final car insurance quotation will be generated using the same information.
If you have made frequent claims, then your insurance provider will presume that you are more likely to claim in future, and it further increases the cost of the premium. On the other hand, if you have a clean driving record then you are entitled to avail a no-claim discount.
3. Age of the Vehicle and Coverage
The age of your vehicle is another very important factor that car insurance companies take into account while calculating the final car insurance quotation.
It is expensive to replace or repair a new car and to save yourself from shedding money from your own pocket; it is recommended that you take a comprehensive car insurance policy.
The need for extensive coverage requires you to shell out a higher premium cost for your new car, as old cars can be protected merely with a third-party liability cover.
4. Type of Vehicle and Its Features
The type of car you own is another crucial factor to determine how much coverage you need to have it protected. Insurance premium for basic cars and luxury cars varies because of the cost involved in repair and replacement of parts, and their availability.
Insurance companies also consider the car ratings and safety features in a car model, and if it offers a safe drive – the car insurance premium will also be less. Remember that cars that have a larger engine are comparatively more expensive to indemnify.
5. Agency and Non-Agency Repairs
If you have an agency repair cover then your car will be repaired at the manufacturer’s workshop (same as per car brand). And if you have non-agency repair cover then your car will be repaired at an external garage that is nominated by the insurance provider.
You can also get agency repair as an add-on to your existing car insurance if it is not included as a part of your current plan.
6. Deductibles or Excess
All the car insurance companies’ charge some deductibles or excess, and it is the cost that has to borne by you (the car owner or the proposer), for an accident that is caused by you. Once the deductible amount is filled in the car insurance premium calculator, the cost of premium will be automatically reduced if the deductibles are higher and vice versa.
You can also opt for higher excess or deductibles to reduce your premium. But be cautious with this one, as it is a double-edged sword.
7. Geographical Location
Your area of residence will directly impact your car insurance premium. Out of all the factors,location is one of the primary factors that affect your car insurance rates. The insurance company probably knows more about your locality than you do. After evaluating the crime rates; weather patterns, neighborhood densities, and the severity of claims made from that area they made annually the insurer assess the risk you present.
8. Vehicle Use
How you use your vehicle will also have an impact on the cost of the premium. Whether you are using your car for personal use or for commercial purposes, you need to disclose it to the insurer. Failure to do so can lead to rejection of your claim in case of any mishap while driving the vehicle.
If your profession involves long commuting then your premium can be on a higher side.
9. Marital Status
There are a number of issues that influence the price. And surprisingly, whether you are married or unmarried it matters to your car insurer as well. Statistics reveal that married drivers drive more responsibly and are involved in fewer accidents as compared to single people.
10. Optional Features
The insurance company will charge you an additional amount for every optional benefit or add-ons that you get to your existing policy. It includes additional benefits like off-road assistance, car hiring service, roadside assistance, international cover etc.
But do not expect free lunches here. All the additional benefits and perks come at a cost, and it looks like you will have to bear the cost in the form of insurance premium.
You can also calculate your car insurance premium online using a car insurance premium calculator. For instance, if you have Tata AIG car insurance then you can use Reliance car insurance online calculator to determine the premium.
To estimate car insurance you need to submit the following details –
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Car Year
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Car Make
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Car Model
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Car Model Details
And rest of the details will follow.
Last and most important, do not forget to compare all the options before you make the purchase.