Buying a car insurance plan may surprise us all at some point. The many options available make it an overwhelming experience. It is common for a buyer to ignore all other factors and choose a plan with a lower premium.
Choosing a plan with the lowest premium can also have some adverse effects. While you may receive insurance coverage at a lower price, the coverage itself might be too less. Hence, there might be some damages or losses that the policy might not be able to cover. The above reasons prove that the choice of a four wheeler insurance plan should not be based solely on cost but also other factors should be taken into consideration.
While price is one of the important factors in choosing a policy, it should be noted that it is not the only factor. Let’s take a look at some of the most frequently asked questions regarding car insurance premiums.
What factors affect the car insurance premium?
When you purchase a motor insurance policy, the declared value of the insured (IDV) and the deductibles in your policy have an impact on the premium amounts. Also, if you do not file a claim within the term of the policy, your premium will be further deducted from the No Claim Bonus (NCB) account at the time of renewal of your policy. Additionally, add-ons related to your comprehensive car insurance can also affect your premiums. *
Can the make and model of the car affect insurance premium?
The model and manufacturer of your vehicle is one of the important factors affecting your premium amount. Different models from the same manufacturer have different prices and this can also affect your premium. Your car price determines the amount of insurance and varies for different model cars. *
Does IDV affect the premium amount?
The declared value of insurance or IDV is the maximum amount that the insurance company will pay when your vehicle is completely damaged or stolen. It is the estimated current market value of your car. It is possible to select an IDV in a comprehensive car insurance plan.
If you select a higher IDV here, it will have an impact on your premium. Conversely, if you have to file a claim for damages, reporting a low IDV will result in loss. Therefore, you need to declare the correct IDV, which will also control the premium. *
Can you get a concession on premium if you do not claim for damages?
Yes, insurance companies offer a no-claim bonus, which allows you to lower your car insurance premium. However, it is only possible if you buy the NCB add-on at the time of car insurance renewal. This NCB percentage starts at 20% and can go up to 50% for each successive unclaimed policy term.
However, the question of whether or not you should file a claim for damages depends on your next renewal date as well as the amount of the no claim bonus and the cost of repairs. *
Is there a special car insurance premium calculator for new and used cars?
No, the car insurance premium calculator is the same for new and used cars. It is a handy tool for estimating the premium amount for different plans as well as for different insurance companies. Many insurance companies offer this facility for free on their website. *
Who determines the premium rates for car insurance?
The premium amount varies between a third party car insurance online plan and a comprehensive insurance policy. The regulatory body, the Insurance Regulatory and Development Authority of India (IRDAI), regulates premiums only for third-party liability coverage. The pricing for the comprehensive policies falls under the jurisdiction of the insurance company. You can visit the official website of IRDAI for further details. *
* Standard T&C Apply
These are just some of the questions that are often asked about car insurance plans. Although premium is an important factor in making a final purchase decision, it is important that you consider other features such as add-on features and claim process when making the final choice of your insurance plan. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.