Six Important Factors to decide on your car insurance premium

The process of purchasing or renewing the car insurance policy is a vital task every year for the car owners. In India, it is mandatory to have atleast a minimum of third party insurance coverage. Therefore, many financial and general insurance firms enter into motor vehicle insurance sector and in order to attract the customers they offer numerous benefits for car insurance policies and provide world class customer assistance.

While the sector is growing gradually many times the coverage that you own seems insufficient or irrelevant in terms of features and benefits compared to other insurance companies during the actual purchase or renewal of car policy. Therefore, it is advisable that you compare different insurance costs when you are doing your research.

For better and effective car insurance comparison policy them in terms of prices, features & benefits, payment modes, discounts, flexible options etc. Pay attention on the discount packages available. There are periodical, seasonal or holiday discount options. You can save a lot on car insurance by opting for the highest deductible possible. Compare the rates of all the insurance company. Find out about the reputation of company through friends or family members. May be you can give a visit to the company or try and see if you’re the customer service team mitigates your problems on time. Lastly, be vigilant enough not to fall for old tricks and get trapped.

The article discusses six important factors that you need to compare while buying car insurance quote: Car Insurance Premium has three components- Own Damage, Third Party and Personal Accident cover. Now, let us have a look at the various factors that determine the premium charged for car insurance.

Location

The place where you live plays an important role while determining the insurance policy. Most of the companies look if your cars are from metropolitan cities, are they parked in the safe zones, is your city riot prone or not, are there any thefts incidences? etc. These are would be ideal parameters that companies will look for.

Engine Capacity

Those cars with higher engine displacement (CC) have a higher premium component for the third Party insurances. 

Age of the vehicle          

The depreciation value is directly proportional to vehicle age. So the age of the vehicle increases, the depreciated value reduces and the own damage component of the premium keeps reducing.

No Claim Bonus

No-claim bonus (NCB) is a discount in premium offered by insurance companies if a vehicle owner has not made a single claim during the term of the motor insurance policy.  It is like a reward to the vehicle owner for prudent use of the vehicle. This discount in the premium is usually 20% for the second year, 25% for the third year, 35% for the fourth year, 45% for the fifth year and 50% for the sixth year. 

Make & Model Tracking

The car insurance companies track their claims ratios and see if any vehicle model has made higher claims compared to another make or model. They factor this into the pricing and load up the premium for vehicles which are more prone to accidents.

Profession and age

At times working in government sector or being a member of certain association can help you get discount for car insurance. A member of Automobile Association of Eastern India (AAEI) gets 5% discount on their insurance premium. Similarly, certain companies vary premiums depending on the age of the driver. In Western developed markets even the car colour has a bearing on the insurance premium rates.