Factors affecting car insurance premium

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Car insurance will provide you financial protection against unwanted accidents, theft, and natural disasters. If you are thinking about purchasing car insurance, then you should know about your car insurance premiums. First of all, you need to check all insurers plans and choose the best plan for your car. There are many factors that can affect your car insurance premiums. So, let's find the affecting factors of car insurance:

1.Vehicle Age
Vehicle age is the most common factor that affects your car insurance premiums. Brand-new vehicles have a higher insurance cost due to increased risk exposure and higher repair costs, while old vehicle premiums are lower than new vehicles. As the car ages, its value depreciates due to wear and tear, which typically lowers the premium.

2. Types of Engine
Diesel cars usually attract higher premiums. The premium costs for diesel vehicles are higher compared to petrol vehicles.

3. Geographical location
This is also has a direct impact on car insurance premiums. If you’re in an area with heavy traffic, higher accident rates, or more frequent vehicle theft, your premium is likely to be higher. Urban areas, with their dense traffic and greater risk of accidents or theft, tend to have higher premiums compared to rural locations, where there is less congestion and fewer claims.

4.Claim History
You will get a discount on your premium if you did not make any claim during your previous insurance policy. You should avoid minor claims, and this will reduce the premium when you renew the car insurance policy. A good claims history can help keep your premium lower, while a history of claims can raise the cost of your coverage. 

5. Add-Ons 
Add-Ons add extra security to your car. There are many available add-ons, including roadside assistance, zero depreciation cover, engine protection cover, etc. The more add-ons you choose, the higher the overall cost of your insurance. It’s important to carefully consider the add-ons that suit your needs and budget, as while they provide added benefits, they can also raise the premium you pay.

6.Anti-theft devices
Anti-theft devices certified by the Automotive Research Association of India (ARAI) can reduce your car insurance premium. Car alarms and other kinds of anti-theft devices alert the owner (by sounding an alarm, etc.) when a theft is attempted or the vehicle is being broken down. More advanced cars today come with GPS system that helps in tracking the vehicle. Therefore, the insurance premium for such a vehicle would be lower.

7.Insured Declared Value (IDV)
The insured declared (IDV) value is the current market value of your car. It represents the maximum amount you’ll receive if your car is stolen or damaged beyond repair. Comprehensive insurance policies include IDV, and the higher your IDV, the higher your premium will be. Essentially, a higher IDV means greater coverage but at a higher cost.

Conclusion
Car insurance premiums are impacted by a wide range of factors, like the vehicle age, engine capacity, driver’s profile, and coverage type. After understanding these factors, you can make better choices, pick the right coverage for your car, and even lower your premium by keeping a clean driving record or using no-claim bonuses.