We live in a world where owning a car has become a necessity. But this is a necessity that does not come cheap. Apart from the cost of the car, there are other charges like registration charge, taxes, and cost of insurance that increase the final price of the car. Out of these extra costs, the insurance premium is something that you need to think about. The car insurance premium will vary depending on the type of coverage you opt for, the make and model of the car, and various other factors.
To get an idea of how much the insurance premium will be, you can use an online car insurance premium calculator. It will help you determine what kind of insurance policy to opt for and which company to buy the insurance plan from.
Main factors which Influence the costs of Car Insurance
An online car insurance premium calculator will ask you to enter your personal details and specifications of your car. In return, it will tell you how much your car insurance premium will be. You will notice that this premium differs for different people even if they own the same make and model of the car. This is because a good car insurance premium calculator takes into account many things apart from just the car specifications to determine the premium amount.
Here are some of the factors that influence the price of the insurance premium:
Your location affects your insurance premium amount. If you live in a metro or a crowded city, your car insurance premium will be higher than that for a smaller, less crowded city. The chances of an accident or damages to the car are higher in crowded cities and this leads to more claims and this, in turn, leads to a higher insurance premium.
In India, there are two zones, Zone A and Zone B and the premium is higher for Zone A. Zone A includes cities such as Chennai, Mumbai, Bangalore, Kolkata, Delhi, Pune, Hyderabad, and Ahmedabad.
2. Make and Model of the Car:
The price of insurance depends on the make and model of the car you own. As a thumb rule, the higher its price, the higher the premium you will have to pay. Typically, the repairs for a higher priced car is costlier and this reflects in the insurance premium.
3. Type of Engine:
The insurance premium is higher for cars that have diesel engine when compared to the premium for cars that run on petrol and CNG. The Insured Declared Value or IDV, which is the market value of the car, is higher for cars with diesel engines.
Since the IDV is the maximum amount the insurer can claim for total loss, as this value increases, so does the premium.
4. Security Systems:
Insurance companies like it when you try to keep your car safe. So, if you have an anti-theft system installed which is approved by ARAI (Automotive Research Association of India), then the premium will be reduced.
5. Personal Details:
Your personal details like your age, sex, occupation, etc. are taken into account when the car insurance premium calculator determines the premium amount. The premium is higher if you are under the age of 25 as there are statistically higher chances of you getting in an accident or causing damage to the car. Similarly, if you are married, you are considered a safe driver and therefore your premium will be less. Even your profession plays a role in calculating the premium.
There are many other similar factors like this that influence the car insurance premium calculator.
6. Type of Coverage:
There are different types of coverage available and each has a different premium. The benefits offered by each type of coverage is different and you need to choose one that suits you the best.
However, be aware that the price of the premium will also change depending on the benefits you want.
Other Factors to Consider While Choosing Car Insurance Plans
All the factors mentioned above affect the car insurance premium. Most of these factors are out of your control and cannot be changed. However, there are certain other factors that you should consider while choosing a car insurance plan.
1. Claims Paid:
While there are many companies offering car insurance, you should be careful while deciding the company from which you buy your insurance. Choosing a company that pays almost all of the claims ensures that you get what you paid for when you really need it.
Sometimes, the benefits being offered by an insurance plan are just not enough and you need more. In that case, you can opt for add-on benefits. But keep in mind that these add-on benefits come with added costs too.
3. Credit Score:
Your credit score also impacts the insurance premium you will have to pay. The better your score, the lower the premium amount.
There is no definitive formula by which the car insurance premium calculator calculates the premium you have to pay. Also, there are many factors that affect the premium. The car insurance premium calculator by Coverfox.com is a good tool that helps you compare different car insurance policies and decide which policy suits your needs the best.