Variables That Influence Motor Insurance Premiums

It’s wise that you’re considering purchasing motor insurance. Can The insurance company offer you a policy with the premium you want? 

The following list of variables can determine this:

1.  Make, model, and variant of the vehicle –

From the insurer’s perspective, the premium is a form of fee charged for offering coverage to your motor vehicle.

The logical understanding is that the premium may increase with the cost of the vehicle. Additionally, the premium rises with the riskier aspect of the vehicle as well. Because of this, SUV premiums can be higher than those for sedans. Like this, a CNG-equipped vehicle requires a more significant premium than a petrol or diesel vehicle.

To find a suitable premium amount as per your vehicle type, it is advised to check for a vehicle insurance calculator online.

2.  IDV (Insured Declared Value) –

The market value of your vehicle is its insured declared value. As a rule, IDV and annual premiums continue to drop as the vehicle ages. IDV calculation includes your vehicle’s age and how well you’ve maintained it. *

* Standard T&C Apply

3.  Coverage type and amount –

All vehicle insurance policies must include third-party liability coverage as per law. However, a motor insurance policy can also include other types of coverage, such as collision coverage. Although not required, it is ideally more beneficial to the insured to have comprehensive coverage. Both varieties of coverage make for comprehensive coverage.

4.  Deductibles –

A deductible, also called “voluntary access,” is the sum the insured agrees to pay when filing a claim.

For example: let’s say someone chose a 10,000-rupee deductible for their insurance. Imagine a scenario where he had to pay Rs 60,000 in damages because his vehicle crashed into a tree.

In this scenario, his insurance company must reimburse him Rs. 50,000. However, why would someone choose a deductible? That’s because you’ll receive a much affordable  premium if you selected a higher deductible.

5.  An anti-theft gadget

You may receive an additional reward if your vehicle is equipped with an ARAI-approved anti-theft system. The simple explanation is that an anti-theft system reduces your vehicle’s theft risk, which makes it a less risky transaction for insurance companies.

6.  Savings*

Some professionals (such as doctors, government employees, and military members) may receive an additional premium reward from insurance carriers. Such a reward may be available to Automobile Association members as well.

7.  Making

The motor insurance provider offers the insured a certain per cent of reduction in the renewal premium for each year without a claim. The No Claim Bonus (NCB) can be transferred to another vehicle or policy and belongs solely to the vehicle’s owner.

In contrast, the vehicle insurance provider may penalise the insured with a loading charge of between 10% and 20% each time they file a claim.

8.  Sexes and ages

The maths for the insurer is straightforward: the riskier the deal you get, the higher the premium. For this reason, children may have to pay a more significant premium than adults and married couples.

After carefully comparing vehicle insurance online payment methods, the best method to cost-effective premiums is to purchase motor insurance online. Buying motor insurance online can save a lot of work, money, and time.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

 *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply Source. You can, visit the official website of IRDAI for further details.