Frequently Asked Questions On Car Insurance Premiums
As simple as it may seem, car insurance purchase often puts you in a perplexing situation. You often find yourself wondering the differences between the various car insurance policies and what plan will be better suited for you.
Some purchases are based on cost while a few others based on other factors apart from cost. While price is a crucial factor for the selection, it should not be the only factor. Let us look at some frequently asked questions to simplify the buying of car insurance policies –
What are the factors that impact your premium?
There are various factors that play a role in determining the premium which include the model and make of your car, the fuel type, engine capacity, geographic location where the car is driven along with state of registration. Apart from that, premium is further impacted by Insured Declared Value (IDV) and the deductible of your policy. Further, no-claim bonus is a critical factor that impacts the renewal premium of your policy.
Does IDV impact my car insurance premium?
Insured declared value or IDV is the maximum amount which the insurance company pays for an event of total loss or damage to your car. IDV is approximately equal to the market value of your car and can be set within a specified range at the time of buying car insuranceonline or offline. Often individuals resort to declaring a lower IDV to save premium but on the contrary, this may lead to not receiving adequate compensation when needed. Thus, setting the right IDV is essential to keep the premiums in check.
Will it impact my premium if no claim is made during a policy tenure?
Yes, insurance companies offer no-claim bonus which is a concession at the time of renewing your car insurance policy. The NCB benefits start at 20% and go up to 50% for every claim-free policy year. Now deciding whether to make a claim or not depends on the cost of repairs. If the repair cost is lower than NCB benefits, it is advisable to skip making an insurance claim. Further, NCB benefits are only available on own-damage components of comprehensive car insurance and not for third party car insurance.
How are the premiums fixed for a this-party and comprehensive policies?
The premiums differ between a third-party and comprehensive policy as the coverage varies among these plans. The regulatory body, Insurance Regulatory and Development Authority of India (IRDAI), regulates the premium for third-party plans whereas comprehensive policies come under regulation of individual insurance companies. When you purchase a comprehensive plan, the add-ons further impact your premium. A car insurance premium calculator is a nifty tool that will help you keep your premiums in check and compare the various available policies.
Do different cars have the same premium?
No, the premium for your car differs based on the model and make of your vehicle. Insurance companies consider the age of your while determining the premium amount. Further, the premiums for different models from the same manufacturer as well differ.
These are some commonly asked FAQs on car insurance premiums. Remember that premium isn’t the only factor to consider but other features that might benefit you are instrumental in determining the purchase.