Every person who wishes to drive a four-wheeler in India needs to have a car insurance policy. It is mandatory as per the government rules. In fact, car insurance should not be seen as something forced upon you. Instead, it is something important which can keep secure financially and protect you from liabilities.
Whether you have a new car or a pre-owned one, accidents and mishaps can happen at any time. Any damage to your vehicle can cost you too much. Similarly, if your car meets with an accident and causes damage to another person, property or vehicle, car insurance can help you cover those expenses. Therefore, it is a financially sound decision to have a car insurance policy.
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There are two types of car insurance available in India. They are:
Third-party coverage – In this type of car insurance policy, all the liabilities and expenses related to the third party in the form of property damage, personal injury or death is covered. It does not cover anything related to you and your car.
Comprehensive coverage – Comprehensive coverage covers third-party liabilities as well as personal liabilities. Expenses related to damage, fire, theft etc are covered under this type of insurance policy.
So, what are the factors that will affect the premium you pay for car insurance? The factors are listed below.
Insured Declared Value – When you buy car insurance for your four-wheeler, IDV is regarded as the market value of that car at that time. This means that a new car generally has higher IDV and thus attracts a higher premium cost than a second-hand car. It is always best to get an IDV which is close to the market value of the car.
Make and Model
Make and model of your car determines the insurance cost of your vehicle. Luxury cars or SUV will ask for a higher premium. Similarly, the vehicle fuel type and the mileage offered is considered to determine the premium.
If your car is old, it signifies IDV is less. The older it becomes, lesser the IDV and the premium related to it.
Engine – Cubic Capacity
Cubic capacity is the power produced by the engine. IRDA decides the premium of a car after determining the cubic capacity of the engine. These rates are revised every year by the IRDA.
If you live in a metropolitan city, the car insurance premium will be more. Also, if you reside at a place which is prone to vandalism or anti-social elements, the premium is likely to be higher.
Add-ons, along with the basic car insurance policy, cover different expenses like personal accident, driver, engine protection etc. It can increase the premium of the car insurance.
Taking all these factors into consideration, you can calculate how much will the car insurance cost.
Future Generali is one of the leading, and trustful insurance companies with its center spread across India. For more details and information on insurance, contact us at any time.