The payment for car insurance is called the premium, resulting in a policy document. This document, called Policy Wordings, is like a contract outlining the terms and conditions. Paying the premium doesn’t guarantee full claim reimbursement; it depends on meeting the Policy Wordings’ requirements.
Ten Factors That Affect the Cost of Car Insurance:
- Model, Make, And Variant
The insurance cost for a high-end sedan will be higher than a hatchback’s. This is a result of the fundamental makeup of the car. Because of this, your car’s manufacturer, type, and engine cubic capacity will all directly affect the price of your car insurance.
- Age
The age of a vehicle plays a significant role in determining car insurance costs, mainly influenced by factors such as Insured Declared Value (IDV) and depreciation. Depreciation refers to the gradual reduction in a vehicle’s value over time, which directly impacts the IDV – a metric representing the current market value of the car. In simple terms, older vehicles generally have a lower IDV due to higher depreciation rates, translating to a reduced market value. Consequently, the lower IDV leads to lower insurance costs for older cars when compared to their newer counterparts.
- Cover
Indian law requires basic third-party coverage for third-party liabilities. Comprehensive car insurance covers your own damage and third-party liabilities, and you can add riders for enhanced coverage. Third-party insurance is cost-effective but offers less protection, while comprehensive coverage costs more due to its broader protection, leading to higher premiums.
- Location
The cost of car insurance in a metro area will be higher than that of a tier 3 city. This is due to the perception that cars are more likely to sustain damage in urban areas. In a metropolis like Mumbai, for instance, factors like growing traffic, clogged roads, etc., frequently cause accidents.
- NCB (No Claim Bonus)
Insurance companies may reduce your premium when you do your car insurance renewal online if you have not filed a claim during the previous policy period. Make sure that you take in all considerations before making a claim. Before filing a claim, review the NCB component (if applicable) and determine whether filing a claim is warranted. Claims are subject to terms and conditions set forth under the motor insurance policy.
- Add-Ons
Add-ons provide increased security. Furthermore, extras typically have a cost. This also holds for insurance. Your premium will increase if you add passenger coverage, zero depreciation, etc. Therefore, it is advised only to purchase Add-ons that you genuinely believe are essential. You can use a Bajaj Allianz car insurance premium calculator to calculate the costs of your premium. Claims are subject to terms and conditions set forth under the motor insurance policy.
- Deductibles
A Voluntary Deductible is one way to lower your insurance cost. This indicates that you will make a fixed contribution to the claim amount. Because of this, the insurance company can lower premiums by having to pay less to settle claims.
- Anti-Theft Device
You may be eligible for a car insurance premium reduction if you equip your car with an anti-theft device approved by the Automotive Research Association of India (ARAI). Don’t pass this one up!
- Seller
Buying car insurance from an agent may lead to a fixed policy with unwanted coverage, potentially costing more. Purchasing insurance directly from the provider is advisable to customise your coverage and avoid unnecessary expenses.
- Digital Insurance
Due to lower operating costs, digital insurance providers offer affordable and feature-rich car insurance. When buying or renewing a policy, compare quotes on the websites of insurance providers to find the ideal deal.
Get insured anytime, anywhere! Check out Bajaj Allianz General Insurance website to learn more and download the app now.
Standard T&C Apply
All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.