Car Insurances 262 views
When you buy the car insurance from an insurer, you are required to pay a certain sum of money towards the premium. Insurance companies charge premium to cover you and your car against any damage or unforeseen risk. Premium rates differ across the cars and owners. You must be asking why? The answer is a series of factors ranging from insurance to the type of model you choose. All such factors are explained below. Keep an eye on the same to reduce your premium payment liability.
- No Claim Bonus (NCB)- Car insurers offer NCB to customers who have not made any claims on the policy for a stipulated time period of around 12 months. And if you figure in the same category, then you can be awarded with a discount of up to 20%-50% on your car insurance premium.
- Deductible amount- Car insurance deductible is a critical factor in the premium payments. In order to lower the lower insurance premium, you must set a higher deductible amount. But make sure it doesn't pinch your pocket hard.
- Choose need-based add-on covers- The add-on covers, which most of you opt for enhancing the coverage of car insurance policy, can add up the cost on the premium. Therefore, you must choose need-based add-on covers to keep the premium amount in check and take the benefits of the insurance policy.
- Credit score- Credit score is a critical factor that can be a game maker/game breaker as most car insurers check your credit history before deciding the premium rates on the car. A healthy credit score can reduce your car insurance premium. The premium rates will go up in the event of bad credit score.
- Profession- Choose the profession that is least likely to cause an accident to reduce the car insurance premium. People with professions that are most likely to cause accidents may have to shell out more on car insurance premiums. The reason for such variation is due to the fact that most car insurers decide the premium amount based on the probability of accident risks in your profession.
- Residence area- Car insurance premium rates are also dependent upon the location where you live. For example- people living in safe neighbourhood can get the benefit of lower insurance premium on car. But the premium will be higher for people staying in an area fraught with risks of robbery, damage, etc. Moreover, cities are divided into metros and rest of other locations. If you stay in a metro city, then be ready to shell out more on car insurance premium. But if you reside in locations other than metro cities, then the premium amount will be lesser.
- Car model- Car insurance companies keep an eye on the data and statistics with regards to the claim ratios of various cars and their variants to take a call on the premium rates. Car models with a higher claim history is supposed to have a higher insurance premium than those with a lower claim ratio. High-end car owners have to pay a larger insurance premium compared to those owning mid to low-end vehicles. Simply because the cost of repairs is much more expensive in high-end cars than low-end in the event of any accident.
- Ensure installation of safety features in your car- When you buy the car, make sure safety features like advanced braking systems, tracking devices, anti-theft devices, airbags, etc. Doing the same will not only ensure a safe ride but also help reduce the car insurance premium as insurers keep a close look on such safety elements. You can take benefit of lower premium or discounts on the same if your car is fitted with any safety device in the list of Automobile Research Association of India (ARAI).
- Choose car with powerful engine- Car insurance premiums vary with the engine capacity of the vehicle. Insurance premiums will be much lower in a car with powerful engine compared to the one having less engine capacity.
- Car age- The age of the car can also determine the value of insurance premium. For instance-if your car is an old one, then the premium rate can go up as the cost of repairs may be higher. But in case of a new car, the premium rate will be lesser as the repair cost is mostly likely to be minimal. But even if your car is an old one, make sure you do the requisite servicing of the vehicle from time to time. Doing the same can convince the insurer of the car's safety and thus the insurance premium may get reduced.
- Maintain good driving record- A healthy driving record is essential for car owners to reduce the insurance premium on the vehicle. But a bad driving history involving a series of accidents, rash driving intentionally or under the influence of alcohol, increased claims, etc, can force the car insurer to raise the premium amount.