Insurance is like a spare tyre. You may not require it, but not having one is not an option.

10 Factors that Influence the Price of Your Auto Insurance Policy

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Policy Coverage

Customer Service

Claim Experience

Responsiveness

Cashless Garages

There are multiple factors that determine the cost of your car insurance policy; all are based on how likely you are to be involved in an accident. Not all insurance providers use all of the parameters mentioned below, but this list indicates the most relevant ones.

  1. Your driving history

    If you have a good driving history, you will be offered a lower premium. If there has been instances of serious traffic violations or accidents, you are more likely to pay a higher price for your policy. You may be required to pay more even if you are a new driver or if you have not held an insurance policy for a number of years.

  2. Usage of the car

    There are greater chances of being involved in accidents if you drive a lot. So, in case you drive your car to work regularly, or frequently travel long distances you will be paying more for the premium. Likewise, if you use your car only occasionally, you will be required to pay a lesser amount.

  3. Locality where the car is parked in

    Your area of residence and the locality where you park your car could significantly affect your premium. There are greater chances of theft and accidents in urban areas. So, people buying a car insurance in these localities have to pay more than those who stay in the rural geographies.

    Additional factors pertinent to the area that affect the cost of your car insurance are,

    Frequency of litigations and cost for the same

    Availability of medical care

    Cost of car repair

    Prevalence of car insurance fraud

    Trends in the weather

  4. Your age

    It is commonly seen that older drivers are involved in fewer accidents, in comparison to teenagers. So, insurance providers charge more for policies when the vehicle is driven by individuals below the age of 25.

  5. Your gender

    On an average, women are found to be involved in fewer accidents than men. They also have lesser driver-under-the-influence (DUI) collisions. Moreover, accidents in which female drivers are involved are generally seen to be less severe. So, women are more likely to benefit from lower premiums, in case other records pertinent to them are clean.

  6. Type of car

    Cost of insurance also depends on the type of car you are insuring. Variables such as the possibility of theft, cost of the car, size of the engine, cost of repairs and the complete record of safety of the vehicle influence your insurance quote. The presence of premium safety equipment in a car makes it liable to qualify for discounts in premium.

  7. Your credit score

    Most insurance providers consider the credit score of the driver as one of the most relevant and statistically valid tools in determining whether he would file a claim. It is also believed to indicate the average cost of the claim. The credit based insurance scores of an individual are determined from his payment history and its length, collections, bankruptcies and outstanding debt.

  8. The type of coverage and the amount insured

    It is mandated by law that you should purchase a minimum amount of liability insurance. These limits are generally low, and hence, people should consider purchasing more than the minimum requirements for effective protection from risks. If you have a new car, you will benefit from the purchase of a comprehensive insurance policy. Such a plan pays for damages to your vehicle when it is affected by weather, theft or other unforeseen circumstances.

    However, a comprehensive coverage is subject to deductibles. A deductible is the part of the amount that the insured would bear for each claim, before the insurance company provides its share. Your car insurance premium will be lower when the deductible is higher. Although the comprehensive cover is not mandatory for private ownership and usage of the vehicle, you will need to purchase it if you plan to lease your car to third-party.

    Other useful add-on coverages like zero depreciation cover and roadside assistance cover could also increase the cost of your insurance policy.

  9. Loyalty

    It is understood that insurance providers use a price optimisation technique to determine the premium for loyal customers. Then they offer their long-standing customers a 10% loyalty discount, after a 20-25% raise in premium at renewal.

  10. Inaccurate IDV

    Insurance declared value (IDV) is determined through evaluation and the car manufacturer’s listing of the selling price. This is inclusive of parameters such as the vehicle parts, the model of the car and when it was initially insured.

If the insured opts for a higher IDV, he will be required to pay a higher premium, and vice versa. IDV also has an impact on your own damage premium, but it does not affect third party insurance premium.

It should be noted that if you opted for a lower IDV to save on premium, your car’s value would be lowered in the event of a claim. So it is advisable to fix your IDV based on the market value for more savings in the future.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

Car Insurance Reviews

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  • Tata AIG Car Insurance
    "Satisfied policy"
    0.5 5.0/5 "Blown Away!"
    TATA AIG is the best company to take the car insurance. Since long time i have taken this insurance. The customer care people used to call me to renew the policy and they used to policy renewal letter. I will do payment through online. Several times i have claimed the policy and i have received very good response.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 18, 2019
  • Universal Sompo Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this insurance policy a long time back and it has been a good insurance policy. I had been paying the premium online and the payment method has been convenient. There has been a claim made once and the claiming method has been simple.
    Was this review helpful? 0
    , navi mumbai
    Reviewed on Jan 18, 2019
  • New India Car Insurance
    "Comprehensive benefit policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance was taken from New India. I don't speak with their customer care since i don't require it. I had a claim experience which is a easy process without any tension. As per their policy, the maximum claim amount settled. Since they are providing good services i have opted this policy. They have given me a road side assistance and bumper to bumper facility.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • Bajaj Allianz Car Insurance
    "Good to Go with Bajaj"
    0.5 4.0/5 "Great!"
    The conditions and the insured which they are providing is good, I have insured Ford Car with Bajaj Allianz, the premium amount is reasonable but they can reduce it. Its 1.5 year old year but still the insurer providing 24 hours service, cash less garages and they have tie up with many centers, the response is great.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • ICICI Lombard Car Insurance
    "Premium should be standard as per market"
    0.5 4.0/5 "Great!"
    I never used the policy if something happen I claim it, I didn't interact with the customer care but I get the reminder message for car renewal. I have insured my maruthi Suzuki riz with ICICI Lombard, The premium is higher but still they are good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 14, 2019
  • HDFC Ergo Car Insurance
    "Very good"
    0.5 5.0/5 "Blown Away!"
    Even my car was insured with HDFC Ergo. It is a second-end car and have chosen the third party insurance. I have not done any claim so far. The premium is reasonable. It offers bumper to bumper facility and road side assistance. The policy period is 2 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 14, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 1
    , tirupur
    Reviewed on Jan 10, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 10, 2019
  • National Insurance Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this Insurance policy for my Maruti Car and i had been paying the premium on an annual basis. The premium amount has not been too high and there has been cash less garages available with this insurance policy. Their customer support has also been helpful at times.
    Was this review helpful? 1
    , pune
    Reviewed on Jan 09, 2019
  • ICICI Lombard Car Insurance
    "Nice Policy"
    0.5 4.0/5 "Great!"
    My car was insured with ICICI Lombard. Last year i have purchased this insurance policy. My wife has referred me about this policy. I pay the premium amount of Rs. 13500. They have given me a convenient IDV value. I had no claim experience so far.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Need to improve the service"
    0.5 3.0/5 "Satisfactory"
    I'm not satisfied with the service provided by new India. I have bought the car insurance policy. They closed their branch on every weekends hence its difficult to renew the policy. I have been paying the premium amount of Rs. 14000 which is a competitive price. They have given the IDV value of Rs. 1.50 lakhs.
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Average Car Insurance"
    0.5 3.0/5 "Satisfactory"
    My car insured with the New India Insurance company. I have been renewing the policy with the same company for 3 years. I have paid the premium amount of Rs. 7000 and they have offered me a satisfied coverage value. The documentation process was fine
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • review Car Insurance
    "Its Good"
    0.5 3.5/5 "Pretty good"
    Last year I had car policy with Bharthi axa whenever I try to renew it ask my poliy no, whenever I mention the same, it shows the its incorrect. If I try to reach the customer care its not reachable. I done the claim, some minor damage back side of the car, they have processing fee 1500. Remaining all taken care by the insurer.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Great Policy"
    0.5 4.0/5 "Great!"
    ICICI Lombard has a good brand value hence i have selected the car insurance policy with this card and the dealer has also recommended about this policy. I pay the premium amount of Rs. 9000 and this is a 100% coverage with bumper to bumper facility. I'm not sure about the IDV value. Its easy to renew the policy.
    Was this review helpful? 2
    , new delhi
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Good"
    0.5 5.0/5 "Blown Away!"
    Previously my car was insured was with ICICI Lombard and it was offered by the showroom. I got a call from the representative for the policy renewal as reminder. I got the insurance paper. I have not done done a claim. It is a comprehensive with zero dep. The premium was high so changed my insurer.
    Was this review helpful? 1
    , mumbai
    Reviewed on Jan 08, 2019
  • Future Generali Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    I have taken a car insurance from Future Generali through online portal. The premium was reasonable and also they have provide bumper to bumper facility. The policy period is one year. There is no interaction between the customer service. I just gave my car for the claim so no experience.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 08, 2019
  • Oriental Insurance Car Insurance
    "Good insurance company"
    0.5 2.0/5 "Expected more"
    Dealer has referred me about this oriental car insurance when i purchase the vehicle. They have rejected the claim since the copy of FIT is not available. They have given me a coverage value upto Rs. 6 lakhs. For the past 3 years i have been renewed the policy with the same company.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Iffco Tokio Car Insurance
    "Good Policy and you can try"
    0.5 4.0/5 "Great!"
    Two months before, i have taken my car insurance policy with Iffco Tokio. Its a PAN India agreement policy for my Maruti Car. I don't remember about the coverage value. This is a zero depreciation policy. I paid the premium amount of Rs. 6500. I have not seen any add on and cashless garage facility.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Its Excellent"
    0.5 4.0/5 "Great!"
    My brother is working with Reliance hence I took my two wheeler policy from this insurance company. I have hyundai accent car, they are providing cash less garages for the damage. I have zero depreciation bumper to bumper policy for the term of one year.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance policy was taken with reliance. The dealer has provided me a policy with this policy. This is a 100% coverage value which covers the bumper to bumper facility, They have given me a IDV value of Rs. 11 lakhs. I pay the premium amount of RS. 33000.
    Was this review helpful? 0
    , thane
    Reviewed on Jan 04, 2019
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