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What are the general and personal factors affecting car insurance premiums?

One of the essential considerations while buying four-wheeler insurance is the premium we pay. As investors, we are interested in finding car insurance that offers maximum coverage at a low premium. But there are plenty of general and personal factors affecting the premium we pay. Let us find out what are they.

The general factors

The general factors are as follows:

Make, model, and size of the vehicle

The make, model and size are important factors that affect the car insurance policy premium amount you pay. Also, the market value of the vehicle impacts the payable premium directly. The manufacturer, vehicle types such as sedan, hatchback, MUV or SUV, and the engine’s cubic capacity help decide the premium.

If you own an SUV or MUV, chances are your premium will be higher than a sedan or a hatchback. Meanwhile, a coupe car is smaller in size, but the premiums are higher due to the luxury quotient.

Vehicle age

The car policy premium for a new four-wheeler is generally higher than an older one. This gets attributed to the fact that if the new car gets damaged or totalled in an accident, the insurance company pays a higher sum as compensation than the older car. The vehicle age directly affects the insured declared value. A new four-wheeler has a higher IDV than an old one.

Engine or fuel type

Cars run on both diesel and petrol. If you own a diesel car, your premium will likely be higher since they are generally more expensive than petrol ones. A higher price tag also increases the IDV. Alternatively, if you own a vehicle that runs on petrol or CNG, it is considered economical, and hence, the premiums for these are typically lower.

The location

The place where you reside is also crucial in deciding the premium. The online car insurance you buy in Zone A cities like the metro cities of Mumbai, Delhi, Kolkata and Chennai, and tier 1 cities like Bangalore, Pune and Ahmedabad have higher premiums. All other Indian cities fall under Zone B, and the premiums for these are lower. If you live in flood, theft-prone areas, or conflict zones, you could end up paying higher premiums.

Personal factors

While talking about what affects the vehicle premiums, we should consider personal aspects too, which are:

Owner’s age

Younger drivers are riskier than experienced ones. Lack of driving experience leads to an increased number of accidents and incidents where a vehicle might get damaged or totalled. So, if you have just got your driving license, this is an excellent opportunity for you to pay a higher premium than an experienced driver.

Number of claims filed

This point is used for vehicle owners who have an active policy and needs to do car insurance renewal. If you file claims regularly, there are chances your premiums will be high even for the smallest damages. On the other hand, if you do not file a claim each year, you become eligible for premium discounts in the form of a no-claims bonus.

Traffic violation history

If you have traffic violations under your name, you are not considered a safe driver. Driving without a license, insurance, and PUC certificate violates the law. Other violations include speaking on the phone while driving, not fastening seat belts, exceeding speed limits, breaking traffic signals, and so on. If you get caught Janitorial Cleaning Services Insurance driving under the influence of alcohol or any such intoxicating substances, your premiums increase significantly, or your car insurance might get cancelled.

Now that you know the factors, consider both while buying car insurance online or offline. Make comparisons and get the best deal.

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