Factors determining Car Insurance Premium - Greyfont

Factors determining Car Insurance Premium


The new rules that have come in, which clearly state that a car cannot hit the Indian roads without a third party car insurance has determined the need for car insurance premiums now than ever. Sometimes a buyer may fall prey to high amount of car premiums for the car insurance, which becomes a burden to the person purchasing the premium policy. To ensure that the car insurance policy suits the need of the customer, it is of the essence that the customer is well aware of the factors that determine the amount payable for the motor insurance that he is purchasing online or otherwise.


Having the right amount of know how of some important factors that determine car insurance premium will help keep the premiums to a minimum while ensuring maximum coverage in the amount payable at for the motor insurance thus purchased.


1. Geographical location: one major factor that will determine how much a car insurance premium would cost the owner of a car is the geographical location of the person and the purchase made. One major player in this is the density of the town or place of the car purchase. For instance, if the purchase is made in a low populated area, the car insurance premium will be much lower than in a high populous area. Metropolitan cities as well as crowded states and cities will result in a high premium to be paid for the same coverage.


2. The case of gender and age: the gender of the person of purchase will also determine the amount of the premium that will be paid for the same car insurance policy. In this respect women are the winners as they have to pay lower policy rates as compared to their male counterparts. Another factor determining the premium paid is the age of the applicant. If the person is above 65 years of age the rate of the premium paid is much lower.


3. Another factor that helps in the calculation of the premium thus paid by a person is the type of fuel that the car’s engine has. Here the diesel vehicles fall in the category of a higher premium owing to the higher IDV number as compared to the petrol vehicle.


4. The choice of plan: the choice of insurance cover opted for also will help the person calculate the amount payable as car insurance premium. A comprehensive premium, with a number of add ons for the safety of all would cost the customer much more than the normal third party insurance that is mandatory under the Motor Vehicle Act.


5. Security system: the protection that the car comes with, the security system and its grade is another determining factor the car insurance paid at the end. The more sophisticated the equipment the more one will have to pay for it to be covered under the car insurance of choice.


6. Customization: the customizing of the already existing insurance plan to suit the needs of the owner also  results in higher premium rates. A coverage that will have multiple options and add ones will definitely cause the coverage to be more than the basic car insurance plan opted for.


Listed above are some of the factors that might determine the amount of car insurance that one might pay for their car. However, its best to get the better coverage at a higher rate than be paying more due to the lack of car insurance coverage.


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