Factors that Determine Your Car Insurance Price

Every time you are introduced to words like Car Insurance the first question that pops in your head is “what is the price of the car insurance?” Unquestionably, price plays an important role when buying car insurance. So, to buy a car insurance policy that fits into your budget and needs let us understand the factors that will determine your car insurance price. 

How Is Your Car Insurance Price Determined?

Based on the following factors the price of your car insurance is determined:

• Age of the Car – The age of the car has a great impact on the price of your car insurance, because the older your car, the higher will be the price of your car insurance, as the risk of accidents with the old car increases.
   
• Vehicle Registration Location – The location where the vehicle is registered place an important role in determining the price of your car insurance. For instance, if your car is registered in a metropolitan city like Delhi, Mumbai, Bangalore, Pune, etc., the price of your car insurance will be high as compared to other cities.
   
• IDV (Insured’s Declared Value) – The current value of the car is called the IDV. In other words, IDV is the maximum sum assured that is provided by the insurance company in case of loss or damage to the vehicle. If the IDV is low then the price of your car insurance is also low and vice-versa. It is important to declare the correct IDV to get sufficient coverage for your car.
   
• Cubic Capacity –  The car’s engine’s capacity is determined on its cubic capacity (CC) and that determines your car insurance price. This factor has a direct effect on the price of your car because if the CC of your car is high then the price of your car insurance will also be high and vice-versa. The Indian Motor Tariff Act has specified TPPD premium as per the cubic capacity of the vehicle and this is calculated under the liability clause. Based on the cubic capacity of your car’s engine, premium calculations are separated into 3 categories:
• Less than 1000 cubic capacity
• Between 1000-1500 cubic capacity
• Above 1500 cubic capacity

These are the four main factors that directly influence your premium amount. Besides these, No-Claim-Bonus is another factor because of which your premium amount can fluctuate.

What is No Claim Bonus under Car Insurance?

One of the best features under car insurance is NCB because it encourages drivers to drive safely by rewarding them for every claim free year with discounts on the car insurance premium in later years.

For instance, if you do not make any claim in the first policy year then in the second year you will be eligible for a 20% discount on your car insurance premium. The percentage of discount gets cumulated with uninterrupted claim free years. The maximum percent of discount that you can avail in the event of uninterrupted claim free years is 50%.

However, once you make a claim, you will lose your no claim bonus benefit. And in the event of your next claim free year, the subsequent year will start with a 20% discount on your car insurance premium.

How to Purchase Car Insurance?

Buying car insurance policy online is the easiest and quickest method. Here are some of the Best Car Insurance Plans available online. For any further assistance or queries regarding car insurance, feel free to reach out to us at support@oneinsure.com or 86559–86559. We have a team of experts to dispense unbiased advice to help you select the most suitable plan for your prized possession.