Car insurance premium

Important Factors That Impact Your Car Insurance Premium – Edelweiss General Insurance Blogs

5th July 2022 8min read 150 views

For most families, buying a car is a big deal. You spend months looking for the ideal four-wheeler for your needs and budget. Once you pick your vehicle, you have to get motor insurance coverage. Many families choose third-party liability-only policies since they are light on the pocket. However, a comprehensive car insurance policy provides better financial protection in the long run. You can enjoy better coverage and affordable premiums when you understand what impacts your insurance premiums.

What Impacts Your Car Insurance Premium?

The Make and Model
Your vehicle’s make and model impact the cost of the four-wheeler. Your car’s price, or estimated value, becomes the Insured Declared Value (IDV). The IDV is the maximum amount the insurance company will pay in case of the total loss of your vehicle. A high IDV will likely attract a high  car insurance premium.

Your Location
The city you reside in plays a role in deciding the premium for your car policy. Large metro cities like Mumbai often have a higher premium than smaller towns like Kolhapur. Insurance companies consider the amount of traffic and the likelihood of meeting with an accident before deciding the premium amount.

Personal Factors
Many people do not realise that their age and driving history can affect their insurance premiums. Young drivers under 25 often have to pay a very high premium since the insurance company may consider them irresponsible. Older drivers who have not filed previous claims and have a clean driving record can enjoy low premium car insurance. You should always try and stay safe while driving to benefit from lower premiums in the future.

The Coverage
Your car insurance coverage directly impacts the premium. Policies that only offer third-party cover come with low premiums. A comprehensive plan with several add-ons comes at a higher cost. While picking a policy, consider choosing a comprehensive plan with a few add-ons that add value. Do not opt for add-ons you will not use as it unnecessarily increases your insurance cost.

Added Security
Insurance companies evaluate the risk to your vehicle while considering the premium amount. You can purchase security accessories to keep your car safe and benefit from lower premiums. Installing a security system approved by the Automotive Research Association of India (ARAI) can help. These security alarms deter thieves from attempting to break into or steal your vehicle. Since the system lowers the risk of damage to your four-wheeler, your insurance company might offer a lower premium.

Various factors impact the premium of car insurance plans. By understanding them, you can take measures to get enhanced coverage at the lowest possible cost. You can maintain a safe driving record and take care of minor repairs by yourself to lower your car insurance renewal premium. Remember to renew your policy on time to avail your No-Claim Bonus (NCB), which further reduces your premium payable. Visit the Edelweiss General Insurance website to browse comprehensive and customisable plans at pocket-friendly prices.

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