In simple terms, Car Insurance means financial protection given by the insurance company to the policyholder. There are mainly two parties involved in this agreement i.e. the policyholder and the insurer. There are broadly two categories of car insurance, they are comprehensive insurance and third party insurance. The premium paid on a car insurance policy may be a burden on your pocket but the need for buying a car insurance policy is something which cannot be ignored. The best way to deal with this unwanted expenditure is to get aware of some important factors that affect the car insurance premium.
What does Car insurance provide?
Car insurance in India provides insurance cover for the owner of the vehicle, for other passengers, the car itself and its parts. In addition, third-party liabilities, including people and vehicles are also covered under this kind of insurance. The Insured amount is always the market value of the automobile at that particular point in time. You must compare and zero-in on a car insurance quote on the basis of premiums and for one that provides other add-on Coverage options, riders, benefits etc.
The required knowledge of these determinants will help you to ensure minimum car insurance with the same benefits and coverage. Here are 6 factors which contribute to lessening the amount of car insurance premiums.
1. Insurance Location Geography
It is one of the factors which is impressible and decides your car insurance premium. The geographical location where you live and buy the insurance policy has a major impact on the rates of premium. In case you live in a traffic flooded, the higher will be your premium rates. Premiums are much lower in the places where traffic is very low and the roads aren’t busy like in metropolitan cities.
2. Personal Factors
Personal factors are one of the big factors which decide the rate of premium. Women are required to pay less amount of premium than men because they are considered safer drivers as compared to men. A married individual who buys a car insurance policy has to pay a lower premium amount than someone who is single. Age of the customer is another important factor that can make the rates either shoot up or down. People who are under the age of 25 years are required to pay the highest premium and person who is between the age of 50 years to 65 years needs to pay the least amount of premium.
3. Types of Engine
A higher amount of car insurance premium needs to be paid if the car is running on diesel. The vehicles that run on diesel are pricier, so is their IDV. Hence, the car insurance policy for a diesel engine is expensive as compared to a car that runs on petrol or CNG.
4. Types of coverage
Depending on the coverage and benefits offered by the policy, the premium is subjected to change. Comprehensive car insurance plans are usually are costly as they provide a range of benefits under the coverage to the owner (driver). Comprehensive coverage under a single car insurance plan is expensive.
5. Security System installed
The amount of car insurance premium also depends upon if any security system is installed in the vehicle or not. In case, if your vehicle is installed with a security system, the premium amount will shoot up automatically.
6. Customized Car Insurance Plan
This is another important reason why the amount of car insurance premiums often increase or decrease. A customized car insurance plan that fulfills all your key requirements will cost you a higher amount of premiums. Many insurance companies offer customized car insurance plans that only provide benefits that are important for an individual, including personal accident coverage.
Car insurance premium is prone to change, it depends upon the factors which are mentioned above. You can easily compare the premium amount of different car insurance policies online using car insurance premium calculator. This will help you to buy an affordable car insurance plan available in the insurance market.
7. Coverage Amount
Tha amount of coverage is also one of the important factors which varies the amount of premium to be paid by the policyholder.
Tips to Buy an Affordable Car Insurance Plan
- Make sure you opt for benefits that are important for you and your vehicle, to buy a car insurance policy with affordable premium rates.
- Try to opt for add-on covers, these are extra benefits that can be added when you are buying a new policy or renewing the existing one.
- Take help from insurance agent or broker to buy the best-suited plan at a lower premium amount.