Motor car insurance is mandatory by law. It offers you coverage in case your car gets damaged due to an accident. To get this coverage, you pay a certain amount of money, called a premium, each year to the insurance company, depending on the policy.
A small sum of premium saves you from paying much bigger bills towards the repair of your car in future. In the event of an accident, if your car is damaged, the insurance company covers the repair and parts replacement costs.
For example, if you choose a zero depreciation car insurance policy, also called bumper-to-bumper cover, you can claim the full cover under your comprehensive car insurance.
However, the premiums that you pay for 4 wheeler car insurance can sometimes feel like a burden. Premium rates for the insurance of a car may go up for various reasons. Let us explore some of the factors that may increase your premium in car insurance.
Top 6 Factors that Affect Car Insurance Premiums
Buying Insurance for Car Without Comparing It with Other Plans
Car insurance providers offer different insurance plans. These plans come as third-party plans, comprehensive plans or as own damage covers. So, choosing the right plan can be tricky sometimes. Moreover, different insurers will offer different rates for each policy type.
The best way to buy insurance for a car is to compare the plans before you buy. Take some time and check out plans from different providers. This way, you will see what features cost more and what features you may not require.
Focus on only what you need. Get a plan that covers what matters to you the most. It may take some effort, but it’s worth it to save money and get the coverage you want.
Including Unwanted Add-Ons in The Policy
Comprehensive car insurance plans generally come with optional add-ons that help widen your scope of receiving benefits. However, it increases the insurance premium. So, do not go for too many add-ons; just go for the ones you really require. It will help you keep your insurance premiums in check.
After you choose your add-on features, calculate the final premium. If you find it too much to bear, you can remove a few from the list.
Not Choosing a Custom 4-Wheeler Car Insurance
Many customers make the mistake of going for a general car insurance policy. There are two types of motor car insurance that are available in the market. One is a comprehensive car insurance policy and the other is a third-party liability policy.
The comprehensive policy provides comprehensive coverage and the liability policy offers limited coverage. You should choose a plan by considering your car usage. If you are going to use your car regularly, then you must go for comprehensive coverage. And if you are going to use it only once in a while, go for a third-party liability policy.
Not Considering the Discount Options in The Car Insurance Policy
There are many discount options that come with car insurance. Your car insurance premium depends a lot on these discounts. Many insurance buyers skip these discount options and they end up paying a higher premium.
Read your car insurance policy carefully to learn about all the discounts that you may avail. This will help you save money and keep your premium in check.
Choosing a Higher IDV
IDV (Insurance Declared Value) is an important factor that you must consider while buying a car insurance plan. Choosing the right IDV value helps you get a higher settlement value in case you claim coverage. However, a higher IDV means a higher premium for your car insurance.
Whether you buy your car insurance plan online or offline, confirm the IDV before finalising your plan. Proceed only after you are sure of what you expect from your 4-wheeler insurance coverage.
Bad Driving Record
If you have a record of rash driving, speeding or violation of other traffic rules, your car insurance premium may increase. The reason is if you have made multiple claims for breaking traffic rules, your premium will increase at the time of renewal.
Conclusion
While choosing a 4-wheeler car insurance plan, you must make an informed decision to get the best value for money. Read through the policy document to learn about the benefits, add-on features and other aspects.
Choose features that you need and do not go for anything unnecessary in the plan. This will help you keep your premium in check.
Most online insurers like Tata AIG will offer a car insurance premium calculator on their website to help estimate your premium rates before policy purchase. This can help you compare and choose a car policy that will offer adequate coverage at a reasonable price.
