Factors To Consider While Calculating Car Insurance Premium
Many factors are typically taken into consideration when choosing a car insurance plan. Ensure you know these to bargain with the insurer of your choice correctly.
How Are Premiums For Insurance Determined?
The premium in an insurance plan, covering your vehicle and potential financial liability in accidents, is determined by factors beyond the car’s value or Insured Declared Value (IDV). Various elements influence car insurance rates.
- Vehicle Make, Model, And Version
The unique construction of each car model significantly influences insurance costs. Factors like make, model, version, engine capacity, and type (SUV, sedan, hatchback) impact a car’s performance and risk of breakdown. These variations affect insurance premiums as the Insured Declared Value (IDV) may differ based on the car model and its variant.
- No Claim Bonus
Insurers offer a No Claim Bonus (NCB) concession when you haven’t filed claims in a specific year, potentially reducing your yearly premium by up to 50%. Remember to discuss NCB during Bajaj Allianz car insurance renewal or transfer, and avoid filing minor claims that could impact your eligibility for this bonus. Ensure you understand when initiating the car insurance claim process is worth. *
- Add-Ons In The Guidelines
Motor insurance plans offer riders various types of coverage, such as medical coverage, passenger coverage, 24/7 spot assistance, engine damage coverage, critical loss coverage, and more. Adding these riders increases the premium but is a valuable investment, providing long-term benefits tailored to your needs. *
- Your Location
Metro area residents will likely gain more damage due to heavy traffic, congested roads, etc. In comparison to rural areas, urban areas also have higher living expenses. This implies that car models will cost more in cities, and repair costs may also be higher, affecting your premium.
- Theft Prevention Tools
The Automotive Research Association of India (ARAI)-certified anti-theft devices can reduce insurance costs. The likelihood of theft is decreased if your car has an approved anti-theft device installed. Using the tool would make tracking your vehicle much more accessible, even if stolen. As a result, the insurance for this kind of vehicle would be less
- Upgrades And Aftermarket Modifications
Car modifications can raise your insurance premium, despite how desirable they may seem. Upgrades like larger wheels or a turbocharged engine can impair the car’s handling and cause collisions. Over time, expensive paint jobs or leather seats may develop wear and tear. Therefore, the insurance cost for a modified car will be higher than that for a stock vehicle.
- The Vehicle’s Age
The premium you pay for your car is significantly influenced by age. Since insurance premiums are directly correlated with the price or IDV of your car, the value of cars depreciates over time, just like their respective values. The IDV of a new car will be higher, which will result in a higher premium.
By understanding premium-affecting factors, you can secure a car insurance policy that suits your needs and budget, ensuring adequate coverage for your car’s value. Consider long-term advantages, such as not changing your car to lower insurance costs. Take the necessary steps to purchase a comprehensive policy within your spending limit and understand all your Bajaj Allianz car insurance policy details.
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*Standard T&C Apply
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.
