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

Factors Affecting Premiums for Car Insurance

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To some people, car ownership isn’t merely a solution to a transportation problem, it’s a symbol of success and financial prosperity. It’s a way to show the world that a person has struggled through hard work for a long time (or gotten extremely lucky) and this is the result of the purchasing power that the person has gained.

That being said, the automotive industry has gained the ability to shape wants and desires for its own profit through effective advertising by companies and by designing and producing cars for specific segments of customers. Customers today are spoilt for choice when it comes to buying cars, and more importantly, when buying car insurance or four wheeler insurance as it’s more commonly known.

Whether or not to insure a car is a no-brainer. It’s necessary even in its most basic form as a requirement to qualify the vehicle as road-legal. An uninsured vehicle can cost the driver in more than just fines. Car insurance for your car is just as important as health insurance for you, and your peace of mind. If your car is stolen, the car insurance policy will cover you. If your car is damaged, your car insurance policy will cover that too. If you’ve had a traffic accident, the car insurance policy will be the mediator to settle all disputes and, if you have third party insurance, pay all dues.

Just as the age of the applicant, smoking habits, etc. affect the premiums for health insurance, there are certain factors that affect the premium of car insurance as well. Some of these are listed below:

  1. The owner: The first factor determining your car insurance has nothing to do with your car – and everything to do with you. Studies and research has shown that men are far riskier behind the wheel than women, and it’s for this reason that women usually have lower car insurance premiums. Very old and very young vehicle owners are also placed in the high risk category, and hence have to pay higher premiums. Your marital status, too, can have an effect on your premium amount, as married people are charged lesser for premiums than non-married people.
  2. Frequency of claims: Car insurance companies award safe drivers with discounts and benefits every policy anniversary. If you don’t have any claims on your insurance policy during any given policy year, chances are that your insurer will give you a discount on your next years’ premium payment. This discount on premiums is called a No-Claim Bonus, and every discount you get for consecutive years of no claims stack up and get you bigger discounts on consecutive renewal premiums. This would be great if it wasn’t just balancing the board from what’s called a Loading Charge, which is a penalty increase on your future premiums for every year in which you have to make a claim.
  3. Employment status / title / work: The nature of your employment could also affect your premiums, as professionals like doctors get discounts on premium from most insurance companies. Discounts are also given to government employees, soldiers and all personnel in the country’s defence forces. Some insurance company employees and members of the Automobile Association also get discounts on insurance premiums.
  4. Automated car safety products: If your car has been fitted with an anti-theft device, you would be eligible for a discount on your car insurance premiums. Anti-theft devices and car alarms sound an alarm when the car is being broken into or damaged when the owner isn’t around, and the more advanced devices also have GPS installed which help track the stolen vehicle. Anti-theft devices, while expensive, should be taken and installed even if there’s no discount on premiums, as they are very useful.
  5. Type of coverage required: Premium costs could be cheaper or more expensive depending on the level or degree of coverage that’s required. Higher and more comprehensive coverage can be availed for a higher premium cost. Third party coverage is also mandatory under law, but collision coverage is optional – but getting this is hugely beneficial to the car owner. Coverage can also be increased to cover any damages caused by electrical and non-electrical accessories that don’t come stock with your vehicle.
  6. The make and model of the car to be insured: The car that has to be insured is the other important factor apart from the owner of the vehicle that dictates the major chunk of premium payments. The premium would be higher for riskier vehicles like sports cars of heavy transport vehicles, and is the lowest for slower and more practical cars. The fuel supply of your vehicle can also affect the vehicle insurance – as CNG and gas fitted cars have a higher premium than petrol cars, and petrol cars have a higher premium than diesel cars.
  7. IDV: Insured Declared Value or IDV is the amount that directly corresponds to the current market value of the car. Hence, the IDV decreases over time, as the value of the car decreases every year due to depreciation. The depreciative effects of the IDV can be countered through regular and effective maintenance.

Car insurance is important and mandatory. Since you have to get a car insurance policy anyway, it makes sense to get the best possible one. The insurance policy that comes with your vehicle isn’t the only one out there – as there are many companies that offer car insurance policies with varying coverage and on different terms. Some policies may have easier terms and conditions compared to others.

Car insurance policies with third party insurance are extremely important in big cities, as traffic accidents are more common now than ever. Road rage and accident disputes that are resolved without an official mediator have resulted in fist fights, and in some cases, murder.

*Please note that all promotions, amounts, tenures, repayment requirements, time frames, interest rates, other rates, charges, fees, ceilings, requirements, criteria, features, benefits, exclusions, calculations, ratios, averages, ratings, terms and conditions mentioned above are as of July, 2016, and are subject to change at any time. All banks / NBFCs / insurance providers / financial service providers / companies, etc. mentioned above retain all rights to modify, replace, or add to or subtract from any of the above, in any way, at any time, and at their own discretion. You are requested to reconfirm the same with your chosen bank / company / NBFC / insurance provider / financial service provider, etc. before making any financial commitments.

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

Claim 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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