This is one of the most basic factors that plays a role in determining the Car Insurance Premium. 

✓      Make of the car

The rule here is simple; the safer the vehicle, lesser the risks and lower the premiums.

Easy, isn’t it?

For example, suppose you choose a car that’s equipped with the best locking features that are difficult to break open. This automatically involves lesser risks of it being stolen. However, with a sports car, the risks are inherently more, not to forget the risks stemming from speed driving and accidents.

✓      Any modification to the car

Any modifications made to your car can affect the amount of premium you have to make. For instance, if your car is fitted with manual transmission right from the beginning but you want to go for the automatic one now, that will affect the premium.

✓      Fuel type

While you could take to petrol because of its increased fuel efficiency, diesel can ramp up your car’s performance over a period of time. The fuel you feed your car would also determine the premium outgoes.

Simply put, refers to the Insured Declared Value your car would fetch currently in the market. It is also the maximum amount that you could claim, should there be theft or damages caused to the car. It is arrived at with the following simple calculation:

IDV = Ex-showroom price + Value of fittings (if any) – value written off in the form of depreciation

Therefore, you could be tricked into believing that more the IDV, higher the premium outgoes. While this is true, remember that a lesser IDV can also mean a compromised coverage. IDV that’s nearest to your car’s market value is certainly the ideal here. Also, the IDV would reduce as the car ages.

In short, a No Claim Bonus (NCB) is a token for you having been a responsible driver the entire year. You become eligible for this bonus for every year that rolls by, which is free of any claim. With the option of  NCB, you could be saving up to as much as 50% on Own Damage premiums (fixed according to the IDV). 

Sounds like a jargon? Basically, voluntary excess constitutes the money you’d be ready to shell out from your own pocket, before the insurance provider proceeds with a claim settlement (in the event of a claim, of course). Hence, higher the voluntary excess, lower the premium outgoes. 

Add-on covers might spike up the premiums, but because of the benefits they offer, you’re likely to feel glad that you got them at the time of making a claim.

Some of the more useful add-on covers include zero depreciation cover (provides comprehensive coverage without factoring in depreciation), on-road assistance cover (helps in case your car gives up on you in the middle of nowhere) and engine protection cover and among others.

If you are registered with a valid automobile agency, such as the Automobile Association of India, you could be in luck. Few car insurance companies offer additional discounts on your Own Damage premium with such a membership.

Moreover, anti-theft equipment and devices, approved by the Automotive Research Association of India (ARAI), can secure up to 2.5% discount on the premium outgoes.

Usually, the traffic in urban India is harrowing, and significantly more as compared to its sub-urban counterparts. More traffic ramps up the chances of accidents. Therefore, you might have to shell out a higher premium if your purpose is confined within the city’s contours.

Considering you’re a resident of Delhi (or any other city that falls within Zone A as accorded by the IRDA), the next time your friend from Ranchi says he is shelling out fewer premiums for the same car, don’t think you’re being cheated on. Sometimes, it is just the location that matters.