7 Factors That Affect The Premium you Pay For Car Insurance

March 26, 2019 admin | Comments Off

You may be surprised to learn that your car insurance premium varies from what your neighbour pays or that your parents pay for the same car. This is because four-wheeler insurance companies have a unique way to calculating car insurance premium based on key factors which include your previous claims, your age and the model of the car you drive. Here are 7 factors that affect four-wheeler insurance that you should know about to negotiate for the lowest premium possible.

1. Location of registration of the car

The first question your insurer will ask you is where you stay. With the information related to your address, the insurer will determine whether the car is going to be in a dense metro with a high population and congested roads. In such cases, the chances of an accident are high, and this proportionally increases the number of claims. Thus, living in a crowded city will increase your four wheeler insurance premium. Conversely, living in a rural area with open roads reduces the probability of accidents.

The next location-based matrix that affects your car insurance is related to instances of stolen cars, reports of vandalism and the number of fraudulent claims. Keeping all these in mind, your location plays an important in determining your 4 wheeler insurance policy premium.

2. Age of the insurer

Young, inexperienced drivers are known to be easily distracted on the road and therefore are involved in a higher percentage of accidents. This trend continues till about the mid-twenties, especially among single men. A 4-wheeler insurer will factor in this important information when calculating the policy premium. Every insurer treats age in their unique way, however, age plays an important role in determining the premium charged.

3. Your marital status

Married couples have been historically found to be more careful when on the road, are less distracted by gadgets and pay more attention. For these reasons, those with a married status are offered lower car insurance premiums. You can also avail additional discounts when you combine the insurance for two or more cars.  

4. Your gender

Statistics indicate that young male drivers are known to be involved in more accidents then their female counterparts. This is because male novice drivers tend to be aggressive in the road, especially in their younger years. Further, men also drive more compared to women drivers and are known for risky behaviour such as speeding and not using a seatbelt. These driving traits of men mean they are placed at a higher risk, thus affecting their four wheeler insurance premium rates.  

5. The type of car being insured

Insurance rates are also affected by the historical accident data of the car you are driving. In case other drivers with your car model have been in accidents, the rates will be higher based on this data. A myth about car insurance is that a safer vehicle will come with a lower insurance premium. However, the insurance premium is based on the cost of repair. In case a safer vehicle is more expensive to fix, the insurance premium will take this into consideration.

6. Your previous driving record

Many factors go into determining your driving record including previous claims you have made with other insurers and your past claims history with the current insurer. Based on your driving record, you will be offered discounts and benefits. However, in case you have three or more claims in the same year, you will be considered a risky driver and your car insurance premium will reflect the same. In case you have been a good driver, it is important that you do not get complacent and continue to drive safe.

7. Your credit history

Your credit history is of statistical importance for car insurance since those with lower credit scores are known to file more claims and also file inflated claims. With a higher credit score, an insurer will also trust you to pay the premiums on time. This will lower your premiums. So, it is prudent for you to ensure that maintain good credit history.

As you can see, there are some factors such as age, gender and marital status that you cannot control; however, maintaining a clean driving record and a good credit score are well within your control. Paying attention to these factors will help you pay lower premiums regardless of the car you are driving. For an affordable premium, sign up for a Car Insurance Policy from Bajaj Finserv. They offer comprehensive and third party car insurance with various customisable add-ons to help you find the ideal 4-wheeler insurance policy. Further you can also apply for online car insurance to get the best rates and coverage. To get started, check your pre-approved offer now and apply hassle-free, instantly.