6 Factors That Impact Car Insurance Premiums

The premiums paid towards a car insurance policy can be a burden on your pocket. The need for buying a car insurance policy is something that cannot be ignored. The best way to deal with this unwanted situation is to be aware of important factors that affect the car insurance premium.

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Above-mentioned prices are for a 7-year-old Maruti WAGON R AVANCE LXI (998 CC) registered in Gurgaon and 15 days before expiry of previous policy

The adequate knowledge of these determinants will help you ensure minimum car insurance with same benefits and coverage. Here are 6 factors that contribute to lower the car insurance premiums.

1. Insurance Location Geography

It is one of the impressive factors that decide your car insurance premium. The geographical location where you live and buy an insurance policy has a greater impact on the premium rates. In case you reside in an area where traffic is low you will find lower premium rates. Premiums are much higher in big and metro cities, where you find busy roads throughout the day and night.

2. Personal Factors

Personal factors are also a big reason that decides the premium rate. Women pay less premium amount than men because they are considered safer drivers as compared to men. A married individual who buys a car insurance policy has to pay low premium amount than someone who is single. Customers’ age is another important factor that can push costs either up or down. People under the age of 25 years need to pay highest premium and person between the age of 50 years to 65 years are required to pay the least.

Factors That Impact Car Insurance Premiums

3. Types of Engine

You may have to pay higher car insurance premium for your car in case it runs on the diesel. The vehicles that run on diesel are expensive, so is their IDV. Therefore, the car insurance policy for a diesel engine is pricier as compared to a car that runs on petrol or CNG.

4. Types of coverage

The premium is subjected to change depending on the coverage and benefits offered by the policy. Comprehensive car insurance plans that provide a range of benefits under the coverage to the owner (driver) usually are costly. Comprehensive coverage under a single car insurance plan is expensive.

You may like to Read: What Does Car Insurance Cover?

5. Security System installed

Car insurance premiums also depend upon the security system installed in the vehicle. In case, your vehicle is installed with a security system, the premium amount will go up automatically.

6. Customized Car Insurance Plan

This is another important reason why car insurance premiums often increase or decrease. A customized car insurance plan that fulfills all your key requirements might cost you higher premiums. Many insurance companies offer customized car insurance plans that only provide benefits that are important for an individual, including personal accident coverage.

Car insurance premium is subjected to change depending upon the factors that are mentioned above. You can easily compare the premium amount of different car insurance policies online using car insurance premium calculator. This will help you to buy an affordable car insurance plan available in the insurance market.

Tips to Buy an Affordable Car Insurance Plan

  • To buy a car insurance policy with affordable premium rates, make sure you opt for benefits that are important for you and your vehicle.
  • Try to opt for add-on covers, these are extra benefits that can be added when you are buying a new policy or renewing the existing one.
  • Take help from insurance agent or broker to buy the best-suited plan at a lower premium amount.
Written By: PolicyBazaar - Updated: 26 June 2021
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