Unravelling the factors that influence car insurance rates
Navigate Car Insurance Costs: Insights and Savings with Zurich Kotak General Insurance
When you buy car insurance, you pay the insurance provider a fee in exchange for coverage against financial losses caused by an accident or other unfortunate event. As it is important to select the right car insurance plans, it is also important to understand the factors that influence the cost of car insurance. In this blog, we will study the factors that determine the premium of car insurance and how you can use these factors to save money.
Factors that influence your car insurance premium
Following is the list of factors contributing to the cost of car insurance and how you can use these factors in your favour to reduce car insurance premiums.
Type of coverage:
A third-party insurance only covers third-party liabilities and its premium is decided by IRDAI based on the engine capacity of the vehicle. Hence it is cheaper compared to comprehensive car insurance, which covers both the third-party liability and own damage. The premiums of comprehensive car insurance are higher and vary across insurers depending on the coverage provided.
Make, model and age of the car:
The premium of car insurance also depends upon the brand, type, model and age of the car. Luxury cars, and sports cars with high-end features and powerful engines will have a higher premium compared to the premium for economy cars, due to the high costs of repair. Similarly, an older car will have a lower premium because of its lower market value.
Location:
The location also influences the premiums of car insurance. Premiums are higher in tier-1 cities like Mumbai, Delhi, Bangalore, etc. because it is considered riskier to drive a car in these cities due to the high probability of an accident because of high traffic, and busy roads.
Driving history
Your driving history also determines the premium of your car insurance. Any incident of an accident or a speeding fine will make you a risky driver and the insurance company will charge a higher premium for higher risk. In case after buying a new car insurance you drive carelessly; your car insurance can get cancelled.
Add-on covers:
Add-on covers are optional covers you add to your car insurance policy to enhance coverage. These covers come at an additional premium hence the overall premium of your car insurance coverage increases.
Additional discounts:
If you have not raised a claim in the previous policy year, you get a No Claim Bonus discount on the renewal premium. Hence, before raising a claim compare the claim amount with the NCB discount and you will know if it is feasible to file a claim and lose the NCB benefit or not.
Installing an ARAI-certified anti-theft device in your car can also get you a discount on car insurance premiums. If you opt for a voluntary deductible it will also reduce your premium amount.
Online car insurance
Purchasing car insurance online also helps you save money. As online insurance providers save on operational costs, they offer insurance at a lower rate.
Conclusion
Based on these factors you can get an idea how much it will cost you to get a new car insurance. Use the Zurich Kotak General Insurance premium calculator to get an estimate of the premium amount and decide your car insurance coverage accordingly.
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