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Car Insurance Price Explained

The car insurance price is nothing but the premium you pay for the insurance coverage. The motor insurance company offers the cover in exchange for the premium you pay. This allows you to keep your vehicle secured. There are various factors that contribute to car insurance costs. What exactly are they and how would they impact your motor insurance cover? Let’s find out.

What determines the car insurance price

Here’s a lowdown on the car insurance cost calculations:

  • The type of cover

You can either get a third party liability plan or a comprehensive motor insurance plan. The third party car insurance price is lower than the comprehensive car insurance price. So the type of plan you choose will have a bearing on the premium rate you pay.

  • Your location

If you live in a large, tier 1 city in India, your vehicle insurance premium will be higher as compared to someone living in a smaller city or town.

  • The make and model of the car

A larger and fancier car will cost more money to insure. A smaller and basic car will have a more economical insurance premium rate attached to it.

  • Any riders added

There are several add-on covers available in motor insurance. Every rider is available at an added cost. Thus, the total premium amount for the car insurance policy will depend on the number of add-on covers you have.

  • IDV

The moment your car leaves the showroom, it begins to depreciate in cost. The older the car becomes, the lower its value becomes. When you make an insurance claim, the age and condition of the car will be taken into consideration. This is known as the Insured Declared Value, or IDV, in car insurance. The IDV plays a deciding role in the premium rate of the policy.

These are some of the most common factors that affect the old, as well as, new car insurance prices in India.

How to Save on Car Insurance 

  • Compare and buy online

Online car insurance plans are cheaper than their offline counterparts. Furthermore, when you compare, you get to see the best plans at the best rates. This helps you to buy a good plan at the best rate. So, compare and buy online to save money.

  • Look for discounts

When you install some safety gadgets in your vehicle, the car insurance premium reduces. Similarly, getting enrolled in an automobile association fetches you handsome car insurance discounts too. Look out for all the available discounts and lower your car insurance costs.

  • Adjust the deductible 

If you agree to pay a higher deductible, your premium will be lower. Adjust your deductible in such a way that it works for you in the long run.

  • Renew on time

Renewing your car insurance plan on time proves to be economical as you do not end up paying unnecessary charges such as late fees. Always renew before the policy lapses and keep your vehicle as well as your money protected. 

Give these handy tips a try and you will know how to save on car insurance. 

Rates for car insurance 

Before you buy a four-wheeler motor insurance plan, you may consider using an online premium calculator. This will help you to understand the car insurance premium rates and give you a fair idea about how much you will have to pay. The car insurance calculators are free online tools that quickly and efficiently tell you exactly what the car insurance price will be even before the policy is purchased.

New car insurance price

It is quite understandable that the new car insurance price will be higher than a used car insurance price. This is because the insurance provider undertakes a larger risk when insuring a new vehicle as compared to a second-hand vehicle. However, the exact price you pay for the motor insurance plan for your new car will depend on:

  1. The make and model of the car

The car insurance cost for a new BMW car will be much higher than that of a Maruti Suzuki car. Similarly, you will have to pay more if you have an SUV or a sedan as compared to a hatchback.

  1. Your age and driving record

The age and driving record of the owner-policyholder of the car insurance plan has a bearing on the insurance costs. A younger driver who has made many claims in the past may need to pay a higher car insurance premium.

  1. Location

The traffic condition is worse in a big city and so the chances of an accident taking place are higher too. This is why you end up paying more premiums if you reside in a big city and vice-versa.

In all likelihood, you will opt for a comprehensive car insurance policy for your new car. You may also consider getting a few riders as your new vehicle would require the highest degree of coverage.

Second-hand car insurance price

As stated, the 2nd hand car insurance price list will definitely be lower than a new car insurance rate. This is because an old car has already depreciated in value and the premium calculation will depend on the current IDV. Then, you may opt for a third party liability cover for a pre-used vehicle, which will again lead to a fall in the car insurance price.

To wrap it up

Whether you have a brand new car or you have recently purchased a second-hand car, you need to get a good motor insurance plan to cover it. Car insurance is mandatory in India and you need a policy as soon as you buy the car. Thankfully, there are many options available. Carry out a car insurance price comparison and locate the best car insurance rates. Then, buy the plan online and keep your vehicle protected in a wholesome manner.

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