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Factors that Directly Impact Car Insurance Premium

Factors that directly Impact the Car Insurance Premium

As per the Motor Vehicles Act, 1988 by the Indian Government, it is mandatory for every car owner to be in possession of a valid car insurance policy. In addition to the mandatory third-party liability cover, there are several other types of car insurance online policies that you can opt for in order to enhance your overall insurance profile. When you are buying the motor car insurance policy from any reliable insurer or insurance company, it is highly tempting to reduce the overall premium rates for the same. However, instead of focusing on lowering your overall premium rates, it is important to understand the factors that might impact your car insurance premiums.

By knowing about the factors that could be impacting your car insurance premium rates directly, you can know exactly how to lower your overall expenses in an effective manner. Here are some of them:

  • Age & Gender: Statistically, younger men are more involved in car accidents than older men. As such, more premium rates are incurred over younger men than older men. There is evidence that suggests that older women are more involved in accidents than older men –thus, higher premium rates for older women.
  • Location: As more car accidents tend to occur closer to home, the location that you live in significantly affects your insurance premium rates. Even more densely populated locations with more number of cars imply greater risk of thefts, accidents, collisions, and others. The car repairing costs are higher specific areas, while others may have higher theft rates. Therefore, location plays an important role towards deciding your insurance premium rates.
  • Credit Score: There are several insurance companies taking into account your overall credit score while determining the premium rates. That being noted, you may consider improving your credit score that may help in lowering the insurance premiums.
  • Size of the Vehicle: In terms of the vehicle size, larger cars tend to have higher premium rates in comparison to smaller cars. However, cars that might have larger engines with respect to the body size might have higher rates. Therefore, you can inquire about the vehicle size and its effect on the car insurance premium before buying one.
  • Car’s Age: There are chances that an old car might be totaled in case of an accident. This is because the overall charges for repairs of an old car might be greater than the newer car models. As the cost of replacing a new car tends to be relatively higher in comparison to the older cars, the new cars are not usually “totaled”. This translates into higher collision coverage rates which are directly proportional to the higher premium rates for the new cars.
  • Theft’s Likelihood: There is no denying the fact that new, attractive cars are more prone to potential thefts than older, outdated versions. This results in the higher premium rates for your new, attractive car model. Moreover, high-end advanced features equipped in your car may also be a reason for higher premium rates.
  • Driving History: Some of the car insurance companies might also take into account the personal driving history of the car owner-driver. If you have ever been involved in car accidents, received any tickets, or made previous four-wheeler insurance claims, you might have to pay higher premiums. If you have a poor driving history, some of the insurers may reject offering any insurance policy at all. Even if they do, they charge higher premium rates in comparison to the normal cases.

Good luck lowering the premium rates for your car insurance online plan!

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