How Does a Car Affect the Insurance Policy?

When you buy car insurance online in India, there are certain factors that affect the premium of the plan. From the model of the car to its fuel type, every component of the vehicle comes into play. Take a look at this article to know how exactly the car types affect the insurance premium.

Factors that influence car insurance premiums

When you look to buy third-party car insurance online or even a comprehensive plan, there are a few factors that affect the premium of your plan. They are:

  1. Car type: Cars are classified under various categories. Understandably, different categories have different car insurance premium rates.
    1. Microcars: These are very small cars with an engine capacity of under one liter. These cars are lowest in value and therefore have the cheapest insurance premium and often suffice with a third party car insurance cover.
    2. Hatchback: A hatchback is also a small car, but it is more spacious than a microcar. It is one of the most popular types of cars to be sold in India.
    3. Sedan: Sedans are spacious family vehicles with a boot. They are available in a variety of price ranges. Many people buy sedans. You will pay a moderately high insurance premium for your third-party car insurance or comprehensive insurance plan for the sedan.
    4. SUV: The SUV is a large car that seats seven or more people. These are large, bulky cars that carry an expensive insurance premium.
    5. Luxury cars: You cannot just buy third party car insurance online for a luxury car. These vehicles are super expensive and need the highest level of insurance coverage. You need an all-inclusive comprehensive plan for a luxury car.
  2. Fuel type: When you buy comprehensive or third party car insurance online, the first question you are asked is about the fuel type of your vehicle. If you have a diesel or petrol vehicle, you will have to pay a lower premium as compared to a CNG vehicle.

  3. Coverage type: You can buy two types of car insurance online in India – a third party plan or a comprehensive plan. A third party plan is a basic, compulsory cover that is cheaper. The comprehensive cover is more complex and has a greater degree of layers. It, therefore, is more expensive. So your overall car insurance premium costs will largely depend on the type of insurance cover you choose for your vehicle.

  4. Age: If you have a brand new car, you will have a higher premium. This is because the total insurance cover is dependent on the total and present value of the car. A new car is expensive and so has a higher premium. As the car ages, it depreciates in value. The insurance cover also reduces and so do the premium rates.

  5. Model and make: The make and model of the car also play a deciding role here. You will notice the insurance premium of a Maruti Suzuki Alto will be much lower than that of an Audi Q8. The make and the model of the car always affect the insurance premium.

These are the main factors that affect the premium you pay for your car insurance cover. Now that you know, you hopefully won’t have any further confusion.

Conclusion

Use a car insurance premium calculator before you buy a plan online. Enter all the details like the type of car you have, its fuel type, its age, its make and model number, etc. and get the potential quote. Also, compare all the options you have to find the best car insurance policy for yourself. You will find many good insurance plans from many excellent insurance providers. But you need to scan the offers and see which one suits your requirements the best. Once that is done, buy the plan and keep your vehicle safe and secured at all times.

Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.