Buying a car insurance plan has often left all of us perplexed at some point or the other. The myriad available options make it an overwhelming experience. It is often seen that a buyer ignores all other factors and ends up choosing the plan with the lowest premium.
Opting a plan with the lowest premium puts the insured at a disadvantage. Although having an insurance cover, the policy may not be sufficient to cover the costs of damages.
The above reasons prove that selecting a four wheeler insurance plan should not be merely based on cost, but also taking into account other factors.
While the price is one of the critical factors on which a policy is selected, it should be noted that it isn’t the only factor. Let us look at commonly asked FAQs regarding car insurance premiums.
Which factors have an impact on my car insurance premium?
When you buy a motor insurance policy, the Insured Declared Value (IDV) and the deductibles to your policy will have an impact on the premium amounts.
Also, if you do not file a claim during the policy tenure, your premium will further be impacted due to the No Claim Bonus (NCB) which is a concession at the time of renewal of your policy. Moreover, add-ons to your comprehensive car insurance impact your premium too.
Does the model and make of the vehicle affect my insurance premium?
Your vehicle’s model and the manufacturer is one of the most important factors that influence your premium amount. The prices for different models from the same manufacturer differ and will impact your premiums too. The cost of your car determines the insurance amount and varies for different car models.
Does IDV have an impact on the premium amount?
Insured declared value or IDV is the maximum amount that the insurer pays in case of a total loss or damage to your vehicle. It is the approximate current market value of your car. A comprehensive four-wheeler insurance plan has the option to declare IDV.
Here in case you declare a higher IDV, it will impact your premium. On the contrary, reporting a lower IDV will result in a loss in case you need to file a claim for damages. Thus, you must declare the right IDV that will also keep the premiums in check.
Will I receive a concession in premiums in case I do not file a claim for damages?
Yes, the insurance companies offer a no-claim bonus, which is a form of concession during car/bike insurance renewal. This NCB percentage starts at 20% and goes up to 50% for every consecutive claim-free policy period.
While the question, whether you should file a claim for damages depends on the cost to repairs is more than the amount of no claim bonus at your next renewal date.
Is there a different car insurance premium calculator for new and used cars?
No, car insurance premium calculator is the same for both, new and second-hand cars. It is a handy tool that helps in estimating the premium amounts for different plans as well as different insurance companies. Most insurers offer this facility on their website at free of cost.
Who decides the premium rates for my insurance policy?
The premium amount differs between a third-party insurance plan and a comprehensive insurance policy. While the regulatory body, The Insurance Regulatory and Development Authority of India (IRDAI) regulates the premium for third-party or liability only plans, comprehensive policies fall under the purview of the individual insurance company.
These are some of the commonly asked FAQs about car insurance plans. While the premium is an essential factor in deciding the final purchase, it is essential you take a look at other features like add-on facilities, the claim process while making a final selection of your insurance plan.
