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

Factors Affecting Car Insurance Premium

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Car insurance premium is the overall cost charged by the insurance company to protect you and your vehicle in the event of any unforeseen risk or damage. These premium rates differ not only from owner to owner but also from vehicle to vehicle. There are a variety of demographic and vehicle related factors which affect your car insurance premium. Read on to find out what these are so you can save more on your monthly insurance premium amounts.

Demographic Factors Affecting Car Insurance

  • Credit Score

    Your credit score can positively or adversely affect all your financial transactions, including your car insurance premium. Many insurance companies take into consideration your credit history while deciding your premium rates. Hence, a healthy credit history can help lower your car insurance premium while a low credit score may attract a higher premium.

  • Gender & Age

    Gender and age play a vital role when it comes to auto insurance premiums. Young male drivers between the ages of 16-25 are usually charged a higher insurance premium as compared to women that age. Similarly, among senior citizens, male drivers are charged slightly lesser than old women when to comes to insurance premiums.

  • Where You Live

    Your location can also affect the insurance premium that you pay. If you live in a safe neighbourhood where robberies and theft is a rare occurrence, chances are that your motor insurance premium will be lower as compared to someone who lives in a burglary and robbery prone neighbourhood. Also, cities are divided into zones – metro cities vs the rest of India - for insurance purposes. Vehicles purchased and located in metro cities usually pay higher premiums than those located elsewhere in India.

  • Your Profession

    Car insurance companies do take into account your profession when it comes to deciding insurance premium amounts. If you are more likely to be involved in an accident due to the profession that you are engaged in, your insurance premium shall be higher as compared to someone who is engaged in a relatively lower risk profession. For example, journalists and delivery personnel are constantly travelling, putting them at a higher risk as compared to say, a pilot or doctor, who usually have a fixed commute to the airport or the hospital for work.

  • Your Marital Status

    Your marital status can also affect your motor insurance premium amount. Married individuals are believed to be safer drivers as compared to unmarried individuals.

Vehicle Related Factors For Car Insurance

  • Car Manufacturer

    Auto insurance maintain data and statistics regarding claim ratios of different cars and their models in order to decide the premium rates. Vehicle models which have a higher history of claims will carry a higher premium than those which have a significantly lower claim ratio. Also, high-end models carry higher car insurance premiums as compared to low-or mid-end models as they are significantly costlier to repair in case of a collision.

  • Vehicle’s Safety Features

    Nowadays, most vehicles feature sophisticated safety mechanisms like advanced braking systems, airbags, advanced locking systems, tracking devices, alarm systems, anti-theft devices, etc., making them not only safer to drive but also far less susceptible to damage or theft. Most insurance companies will lower or give you a discount on your car insurance premium if your vehicle is fitted with any safety device or feature as listed by the Automobile Research Association of India (ARAI)

  • Age Of The Vehicle

    The older your vehicle, the lower its value gets, along with the Own Damage premium. If an old car is damaged, it is more likely to be totaled, and the cost of repairs might be higher than the value of the car itself. In such cases, it is more likely that the owner will simply dispose the vehicle. A new car, on the other hand, is less likely to be totaled in an accident and usually carries higher collision coverage rates than old cars.

  • Engine Capacity of The Vehicle

    Motor insurance premiums also vary the capacity of the vehicle engine. For instance, cars with a powerful engine like a V8 yield more power as compared to a car with a V4 engine. Insurance premium, in this case will be higher for the one with a V8 engine as compared to that of V4 engine.

  • Your Driving Record

    Your driving record plays a very crucial role when it comes to determining car insurance premium. Individuals with a tarnished driving history which is peppered with accidents, tickets for rash driving or DUI (driving under influence), higher number of claims, etc., are seen as high risk customers by auto insurance companies. In such cases, not only will the insurance premium be high but such customers are more likely to be turned down for receiving insurance. On the other hand, a clean driving record can definitely accelerate the process of you receiving an insurance policy for your car but also lower your premium.

Insurance Related Factors For Motor Insurance

  • No Claim Bonus (NCB)

    A No Claim Bonus or NCB is provided by insurance companies to customers who have not made any claims on their policy for a stipulated period of time (usually 12 months). For auto insurance, the same process is applicable where individuals who have not made any claims on their policy are rewarded with a discount on their insurance premium which begins at 20% and can go up to a maximum of 50%.

  • Deductible Amount

    Car insurance deductible are an important factor in your monthly insurance payments. The higher you set your deductible amount, the lower your insurance premium shall be.

  • Type of Insurance Policy

    There are two basic types of car insurance policies which you can choose from. The first is a Third Party Liability Only policy which is compulsory by law and protects you against any liability which may arise in an accident involving your vehicle and results on any bodily harm/injury or damage to property of any third party. The other type of insurance policy is a Package policy which bundles Own Damage, Third Party Liability and Personal Accident Cover in one.

  • Add-on Covers

    To enhance the coverage provided by your motor insurance policy, you can also opt for add-on covers. However, any add-on cover will be an added cost to your premium amount. It is wise to choose add-on covers based on your requirement to get the most out of your insurance policy.

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

Factors Affecting Car Insurance Premium Reviews

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  • Royal Sundaram Car Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I took my car insurance with Royal Sundaram. I never contacted the customer service. It is a default insurance from the showroom. The premium is high because I go for bumper to bumper offer, road side assistance, zeo dep. It is a first party insurance and no claim. The policy period is one year.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • SBI General Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    The showroom people has offered me a car insurance policy with SBI. I have made a premium amount of Rs. 22000. They have given me a coverage value of 100%. Total IDV value is 90% of the car value. I have no claim experience till now. The documentation process was done by showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • National Insurance Car Insurance
    "Smart protection with National"
    0.5 4.0/5 "Great!"
    The major factor to chose National Insurance because of the premium is economic, I took the policy for 3 years the IDV value remains the same for the whole tenure. The customer support is good on time they activated the policy. I have Tata Tiago , its around four months vehicle. Its zero depreciation comprehensive plan. I taken the policy through showroom.
    Was this review helpful? 0
    , lucknow
    Reviewed on Jan 19, 2019
  • ICICI Lombard Car Insurance
    "Satisfied with the policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance is with ICICI Lombard. The customer services are good and I got the policy documents on time. The policy coverage is good and there are features of a road side assistance is there. The premium is economical too. Good overall.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • ICICI Lombard Car Insurance
    "Need to reduce the premium"
    0.5 3.0/5 "Satisfactory"
    I had a car insurance from ICICI LOMBARD which was offered by the showroom at the time of purchasing the vehicle. I felt the insurance premium is very high compared to others. I got a reminder call from the customer service at the time of renewal. It has zero dep for one year.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I took my car insurance from TATA AIG through online channel. They have given lesser premium with zero dep and it includes road side assistance. The customer service is very good. The policy period is one year. I have no claim experience. It is a first party insurance.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • 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
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