Wondering how you can save on auto insurance premiums? Or just if you know how to get value for money on car insurance without wasting your time? So this article is for you to shed light on the factors that affect your auto insurance premium.
Your car insurance should give you the financial coverage you are looking for, period!
This means that you shouldn’t spend too much on auto insurance premiums, nor should you lower your auto insurance premium enough to make it less important. And you pay a large sum at the time of the complaint.
But have you thought about how to do this?
There are factors that affect your auto insurance premiums that you may not be aware of.
Do not worry.
Because this article will help you increase your car insurance benefits while maximizing the premiums you pay. A perfect scenario where everyone wins!
Now let’s highlight some lesser-known factors that affect your auto insurance premium.
According to the type of car insurance
There are two types of car insurance. This is a third party policy and it is a comprehensive policy.
Motor Vehicle Liability Insurance is mandatory under the Motor Vehicle Act 1988. It is liability insurance. Protects third parties: material damage, personal injury, or accidental death of pedestrians, vehicle owners, or passengers of another vehicle who could be victims of the accident caused by the insured vehicle.
Comprehensive auto insurance covers damages to your car, as well as civil liability. Buying a comprehensive policy ensures that you are covered for both liability and damage to your own car.
The Insurance Supervisory Authority of India (IRDA) decides the premiums. IRDA takes into account the cubic capacity (cc) of the vehicle’s engine when deciding the premiums it will pay for the third-party policy. The price of the premium changes every year.
Full insurance premiums:
When it comes to a comprehensive policy, it means covering damage to your car. Since each car depends on many factors, premiums vary each year and from one insurer to another.
Know what it will look like for your car and how you can benefit by knowing the factors that go into it.
Car make, model, variants:
Car “Make” implies a car from the same manufacturer, while “Model” means when a manufacturer has a different car segmentation. A “model” can have different “variants” and “versions”.
The type of fuel is important: gasoline, diesel, CNG kit:
The type of fuel used also affects your auto insurance premiums. Premiums differ for gasoline, diesel, and CNG. For CNG there is a minimum increase of Rs 60 plus third party premium tax, while for a full insurance premium it is important whether the CNG kit is installed internally or externally and also varies by insurer. to others.
RTO license plate:
The RTO vehicle registration also affects the premium. In India, auto insurance premiums are segregated based on the location of the vehicle registration. The locations are divided into Zone A and Zone B.
Where, Zone A includes Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Pune, Ahmedabad. And Zone B includes the rest of India.
Depending on the location of your car’s registered RTO, the premium that is taken into account when calculating your own damage factor, including the car’s engine power, will now vary.
Car engine displacement:
The self-damage factor is calculated based on the vehicle’s engine capacity and the recorded RTO. This factor differs from the third party premium when it comes to a complete policy. The third-party insurance premium is based solely on the performance of the vehicle’s engine. The larger the offset, the higher the premium.
The premium for comprehensive auto insurance depends on the price of your vehicle in the showroom. Over the years, the age of the car and the declared insurance value (IDV) decrease with age due to depreciation. The IDV offered by insurers for older vehicles is lower than for new vehicles. This means that the premium for older vehicles is lower. Whereas a new car has a higher IDV and higher premiums.
Your age, profession, driving history, driving location:
Yes, you have read it correctly. Your age, driving history, occupation, and where you drive will affect your auto insurance premium.
So each factor has an influence:
Your age: few insurers offer a good discount to people of a certain age. For example, you can get an additional discount on your own premium for damages if the policyholder is an experienced driver between the ages of 35 and 45.
Your Occupation: As approved by IRDA, as a teacher, government employee, military, CPA, etc., you are entitled to a specific discount on your auto insurance premium. For example, a doctor or certification body can get an additional discount on their own premiums for damages.
To qualify for the discount, you must submit the original receipt at the time of purchase.
Your driving record: you can benefit from an additional discount if you have not submitted a claim during the entire contract period. You can benefit from these discounts on the No Claim Bonus (NCB). The BCN is cumulative. The more years without a loss, the more discounts you get. And if you made a claim in the previous period, you will not be able to benefit from this discount.
Driving location: If you are in or driving in an accident risk area, you may have to pay a higher premium. Car owners who live in a busy location or metropolis pay a slightly higher premium.