Despite being legally mandatory, having a car insurance plan for your vehicles indeed eliminates a lot of financial burden or stress. The financial protection provided by it from any loss or damage not only helps keep your finances in check but also ensures a stress-free ride at all times. The car insurance premium is an essential factor to be kept in mind while buying/renewing an insurance plan. They can weigh down on your pocket due to some aspects that need to be considered. Following are some such aspects.
The Make, Model, and Variant of your Car
It is a known fact that the premiums for a luxurious car or a sports car like a sedan would be much higher than that for a hatchback. Since these expensive cars come with a high maintenance cost, they demand a higher amount of premium for their insurance plan. The fuel variant also plays a role in any type of compensation. A diesel variant car would have a higher premium as compared to a petrol/CNG model. Therefore, the elemental composition, type, and even the cubic capacity of your car’s engine are factors that contribute to the amount of premium. Ensuring to get the policy affordable with the most suitable add-ons for your vehicle is one of the most important decisions you make while purchasing a car.
The Vehicle’s age and Area of Insurance
The age of your car and the location where you get your car insured are two additional factors that direct the premium amount for your car. The vehicle’s age corresponds to two essential interrelated notions, i.e. the Depreciation and the Insured Declared Value (IDV). Depreciation refers to the reduction in the value of your car due to natural wear and tear over time. In contrast, the IDV is the approximate current market value of the vehicle. It will cost less to insure an old vehicle and more for a brand new car due to the aforementioned concepts.
The car insurance from a metro city will be higher than that from a tier-2 or tier-3 city as the frequency of accidents or damages tends to be higher in metros due to heavy traffics and congested roads. Compared to the quiet and easy-going life in non-metros, the metros are more likely to claim for repairs in a fast-paced environment.
Some more factors that play a role in determining the premium amount are the type of coverage, availability of add-ons, anti-theft devices/safety features, no claim bonus, the car owner’s experience, frequency of claims, and voluntary deductibles.
Therefore, while buying/renewing a car insurance policy, bearing in mind the aspects above, compare car insurance online the quotes and add-ons provided by multiple insurers and finally pick an insurance policy that is best suited to your needs. Make a wise decision as, after all, a penny saved is a penny earned.