By Car insurance premiums can be a burden on your finances if not managed well. However, the need for purchasing car insurance cannot be ignored. Hence, the best way to deal with premiums is to be aware of essential factors affecting car insurance premiums.
Understanding Car Insurance Premiums
The car insurance premium is the amount you must pay your insurer regularly in exchange for insurance coverage. Once you pay the premium, your insurance coverage will be active.
To determine the premium amount to be paid, you can use a car insurance premium calculator. It is a car insurance premium estimator that helps you get the best quote for your car insurance policy.
What Factors Affect Car Insurance Premiums
Your Geographical Location
The geographical location where you reside and purchase an insurance policy can significantly impact your car insurance monthly premium.
Medical costs for injuries and car repairs are more expensive in some locations than others. Moreover, metro-city drivers face a higher risk of car vandalism, theft, and accidents; therefore, they typically have higher car insurance premiums than non-metro or small-city drivers.
Type of Insurance Coverage
Car insurance annual premiums change depending on the benefits and coverage a policy provides. Comprehensive car insurance policies that offer a range of benefits under the insurance coverage to the four-wheeler owner are usually expensive. On the other hand, own-damage or third-party insurance might be less expensive as it offers limited benefits.
Age
Age is also a critical factor in determining the insurance premium. Individuals under 25 typically pay the highest premium, while individuals between the ages of 50 and 65 may enjoy a lower premium.
Make, Model and Car Variant
The make, model and car variant play an important role in determining your car insurance policy. A luxury car will attract more premium than a hatchback. Similarly, the car variant, manufacturer, etc., will also impact on your premium amount.
Type of Car Engine
The four-wheelers that run on diesel are typically more expensive, and so is their Insured Declared Value (IDV). Therefore, the four-wheeler insurance plan for a diesel engine is more expensive compared to a four-wheeler that runs on petrol or CNG.
Tips to Purchase Low Premium Car Insurance
Compare Car Insurance Premiums
While looking for the right car insurance, you must compare different insurance companies offer. Comparing insurance rates and benefits can help you find a policy that meets your requirements.
Ensure Safety While on The Road
Ensuring safety while driving protects you and offers benefits in the form of an NCB (No Claim Bonus). The insurance provider offers a discount on premiums at the time of renewal if no claim is filed during the policy term.
Avoiding Minor Damage Claims
If your four-wheeler gets a dent on the headlight or a minor scratch, fixing it would not cost much. By filing a claim for minor issues, you can lose your NCB benefit; thus, it is better to avoid minor damage claims.
To Wrap It Up
Several other ways to reduce car insurance premiums include selecting deductibles wisely, only opting for necessary add-ons, keeping the policy updated, and more. However, while low premiums can be a great benefit, your priority should be getting adequate coverage for your car to ensure complete protection.
