Factors determining motor insurance premium

Owning a vehicle has become all too necessary in the present day and age. The fact that vehicles like a two wheeler or a car has multiple utility only adds up to their merits. They can be used for personal as well as commercial purposes. No wonder we shop around a great deal while making a purchase decision for one of the vehicles that we need. Thus, insuring your prized possession also becomes an important task, as any prudent individual would want to protect and safeguard their investment from uncertainties of road travel.

Vehicle insurance is one such tool through which one may achieve this goal. However, most people find the premium of vehicle insurance a bit taxing. Many are even dissuaded from renewing their motor insurance policy due to financial constraints. This may not be necessary as there are ways in which you can lower your premium without affecting coverage and fulfilling the duties as prescribed by law.

Factors that are responsible for determining the premium you have to pay for a particular vehicle insurance policy are given below:

  1. Body Type of the car (sedan or SUV etc)
  2. Make of the car (manufacturer)
  3. Model of the car
  4. Cubic Capacity
  5. Fuel type (CNG, Diesel or Petrol)
  6. Vehicle Age
  7. Registration place
  8. Price of the car
  9. Age of the driver
  10. Amount which the insured undertakes to incur in the event of a claim

Various coverage provision that is availed by the insured also plays a significant role in determining the premium for a given vehicle insurance policy. The greater is the scope of coverage, higher would be required premium amount and vice versa. Thus, in order to lower your insurance rate it is highly advisable that you chose the coverage carefully and responsibly so as not make any compromise on the safety aspect of your motor insurance policy.

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