A car insurance policy in India is not an option but a necessity from a legal and practical perspective. But as a prospective car owner, you would want to be aware of the different aspects that can impact the premium you pay each month. So, keeping that in mind, here’s giving you a brief idea about all the factors that can make your insurance premium go high or low.
- Car model and age
The type of car you have and its features are going to influence your insurance premium. For instance, a luxury car with certain special features and a specific engine capacity will have a higher premium than a regular hatchback. Also, the age of the car is an important factor to keep in mind. As such, a new car will attract a higher premium than an older one.
- Past driving records
Believe it or not, your past records as a car owner also influence the premium of your car insurance. If your records show incidences of rash driving, accidents, and so on, then you might need to pay a higher premium. On the other hand, a spotless driving record means a lower premium.
- Your current location
The possible risks to a car impact its insurance premium. Thus, it is going to cost more to insure a car in a metropolitan city than in a rural area or small town. This is because urban areas have a greater risk of theft, coupled with traffic, road congestion, and so on.
- The necessary coverage
Your car insurance premium can go higher or lower based on how much coverage the car needs. So, comprehensive insurance, though highly essential, is going to cost you more. Then, there are add-ons you can consider, such as collision coverage or towing coverage, which can also increase the premium.
- Claim frequency
If you make no claims during one year of the policy, then you might get a discount on the premium during renewal. This benefit is called a no-claim bonus. Though a no-claim bonus is usually offered on comprehensive insurance plans by all auto insurers, the bonus amount varies from company to company.
- Age and gender
The incidents of rash driving are seen to be more common in younger drivers than the older ones. At the same time, records suggest that men are involved in more accidents than women. There are also fewer cases of drunken driving and collisions against women than men. Therefore, older drivers and women tend to attract a lower car insurance premium.
- The credit score
If you thought that you only need a good credit score to secure a home loan, then you were clearly wrong. Your credit score must be good even to get a lower premium on car insurance.
The endnote
So, these seven factors are of utmost importance in determining the value of an insurance premium. It is important to talk to your insurance company to get a clear idea about how much these factors will impact your case.
