There is no doubt that car insurance Premiums are crucial, especially from a practical perspective. It is required for any new or used car to be legal in the country. Moreover, insurance protects your car financially against losses resulting from inclement weather.
Let’s See the factors that affect your car Insurance Premium!
Assured declared value, or IDV:
The insured declared value, or IDV, is the amount that reflects the current market value of your car. It is determined by your insurance company and consists of the estimated present value of your car after the depreciation has been deducted.
Car owner:
Accordingly, the premium of your car insurance has as much to do with you as it does with your car. The premium of your car insurance is generally determined by your driving record. A good driving record will enable you to enjoy more affordable premiums for vehicle insurance.
Your car’s brand and model:
The premium for an insurance policy on a luxury sedan will be higher than for a hatchback because of the car’s basic construction. That’s why your vehicle’s type, cubic capacity of the engine, and other factors factor into the premium.
The safety features:
The installation of an effective car lock or anti-theft device may qualify your car for a discount on your car insurance policy. Car alarms and other types of anti-theft devices alert the vehicle’s owner if a theft is attempted or if the vehicle is broken into. Today’s advanced cars come equipped with GPS systems that make it possible to track them down. These safety features play a practical role beyond lowering your car insurance premiums.
Coverage required:
Generally, opting for comprehensive car insurance will incur a higher premium, but it is necessary at the same time. Your premium for car insurance will be determined by the amount of protection that you need for your vehicle. While third-party coverage is mandatory, whether you purchase collision coverage is entirely up to you. The car insurance premium also increases with the add-ons that you choose, such as zero-depreciation cover, breakdown assistance. The price of these add-ons may be an additional premium for the policy, but they can give you peace of mind and helpful tools in real-time. For example, in the scenario of a severe car accident that results in severe damages to your vehicle, having a zero depreciation policy would reduce your losses, as all costs of repair, replacement, and maintenance (for both metal and plastic) are covered.
Frequency of claims:
It is also important to note that no claims made during the annual policy year lead to a discount on the car insurance for the next year. This is known as the No Claim Bonus or NCB. With a better understanding of what raises the premium of your car insurance, you can make a better decision when buying a policy. You can also advise others when they intend to purchase a policy.
We hope you liked this article.