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Factors That Determine Premium Payable On Your Car Insurance

Factors That Determine Premium Payable On Your Car Insurance
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What Are the Factors That Determine Premium Payable on Your Vehicle?

When you fulfill your dream of purchasing a car, your next step should be having it insured. An insurance is a shield to protect it from damage, accidents, thefts, etc. Premium rates depend on several factors which vary between insurance companies. Here are some of the factors that determine the premium rate payable on your car insurance policy.

Market Value of the Vehicle

The premium for your vehicle usually depends on its market value. An insured must pay yearly premium depending on the Insured Declared Value (IDV) of the vehicle. So, if you have an expensive vehicle, your premium will be higher. The type of fuel used in the vehicle is also a factor to decide your car premium.

Safety Devices in Vehicles

Safety features in vehicles is another factor that impacts the premium. Safety features like GPS tracking, safety airbags, anti-theft devices, etc. can lower the premium. Most insurance companies offer a certain percentage as a deduction on premium, depending on the safety features installed in your vehicle.

Usage of the Vehicle

The purpose for which you have bought a car is another aspect insurance companies consider while deciding the premium. Usage is differentiated into long distance, short distance, commercial or personal. For commercial usage, the premium is usually higher.

Credit History and Profession

Insurance companies have access to credit history and use it as a factor to decide premium. While buying a car insurance online or otherwise if you have a strong credit score then you may have to pay less in terms of premium. On the other hand, individuals with lower credit score will have to pay a higher premium. Along with credit score, professions to are deciding criteria. And how? If you belong to the sales/ marketing sector, commuting becomes a part of life. In such scenarios, vehicles are used to the maximum. People under these sectors pay a higher yearly premium due to higher risk factors as compared to other jobs.

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