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5 Factors That Impact Car Insurance Premium for Sedan and SUV

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Buying a car is an aspiration that a lot of Indians share. And buying a new car comes with a bunch of serious discussions. Discussions surrounding whether to opt for a petrol car or a diesel car. Even before that, you would need to decide the type of car that you want. You can choose from a hatchback, SUV or Sedan. And your car insurance premium relies heavily on the type of car you buy.

It is mandatory to buy car insurance policies before you can drive your vehicle on public roads. And this is the reason why dealerships provide you with policies when you buy a car. Your car insurance premium depends on a variety of factors, especially if you are buying an SUV or a sedan. The following are some of the major factors that influence the policy premiums.

Factors That Influence Premium for SUV and Sedan

Insurance companies take into consideration a few factors, that impact the policy premiums. Being aware of these factors can help you make more informed decisions. Here are some of these factors.

1. Car Make and Model

The manufacturing company of your car along with the specific model plays a crucial role in deciding the policy premiums. The Makeover here refers to the manufacturer such as Maruti Suzuki or Tata Motors and the model refers to individual cars such as Baleno or Nexon.

Thus, your car details would usually read as 2022 (year of the manufacture) Tata (make) Nexon (model).

The policy premium depends on the make and model since it involves a variety of internal factors. The vehicle cost would depend on the make and model, and so would the size and engine type. And all of them eventually impact the policy premiums.

It is recommended that you opt to compare quotes by different insurance providers before zeroing down on a specific policy.

2. City of Residence

Another important factor that impacts the policy premium is your residence city. The chances of incidents increase several folds in a city that is heavily crowded or has a larger number of vehicles on road.

As the possibility of accidents increases, insurance providers have to take higher risks to insure the car. And you would end up paying a higher policy premium for a car in a Tier-1 city as compared to a Tier-2 or Tier-3 city.

Similarly, if you stay in a city that has a higher crime rate, it will impact your policy premium. The rationale remains the same since a city with a higher crime rate increases the risk associated with insuring cars. Likewise, there is an increase in the policy premium.

3. Your Driving Record

Your driving record is a key factor in deciding the policy premiums. Insurance providers like low-risk drivers as they are less likely to get into incidents. If you are someone who has claimed your insurance several times in the past, insurance providers would usually tag you as a high-risk driver.

Similarly, if you are someone who has had a lot of traffic infractions to your name, you would be deemed a high-risk driver. Insurance companies would charge a higher premium for drivers that are high-risk drivers. And similarly, low-risk drivers would warrant a lower insurance premium.

4. Policy Coverage

The amount of coverage that you opt for directly impacts your policy premiums. There are different types of car insurance policies that you can choose from. And depending on the type of policy that you choose, the premium would vary.

A third-party liability policy is a barebones policy that offers minimal coverage and the required legal clearance to drive your car. Due to its lower coverage, it is also the most affordable policy.

You can opt for a comprehensive car insurance policy if you are looking for a bit more robust coverage for your car. A comprehensive plan offers third-party liability and adds its own damage cover. Thus, the premiums for a comprehensive plan are higher.

Pay as you drive is a new type of policy that allows you to pay for the policy for only the kilometres that you drive. The three slabs for kilometres driven include 3,000 kilometres, 3,000 to 5,000 kilometres, and more than 5,000 kilometres. You can opt for the slab based on your annual driving. The premium of the policy is a bit more than a third-party liability policy but is less than a comprehensive policy.

5. Engine Option

The type of engine that your car has also impacted the policy premiums. The cost of a car with a diesel engine will almost always be higher than its petrol variant. A higher price tag on the car translates to a higher IDV or insured declared value. And a higher IDV means a higher policy premium as well.

Cars with petrol engines normally are the most affordable ones to buy. Thus, they carry a lower policy premium as well. Likewise, a car with CNG would warrant a higher policy premium as compared to a petrol engine car.

Why You Must Buy Car Insurance

Here are a few crucial reasons, why you must opt for insurance for your SUV or sedan, apart from it being mandatory.

1. Damage to Vehicle

If your car receives damages due to any reason such as a natural calamity, fire or accident, the policy has your back. The benefits are also extended to riots, burglary, theft, etc. A claim will ensure that you do not have to pay for the repairs from your pockets.

2. Network Garages

Insurance providers usually have a healthy list of network garages. These are garages where you can repair your car and opt for cashless payment. Thereby, offering added convenience for your car repairs.

3. No Claim Bonus

People who do not claim their insurance policies can benefit in the form of a No Claim Bonus . For every year that you do not claim your policy, you are entitled to a discount on the policy renewal. And the discount can start from 20% and go up to 50%.

Conclusion

There is a myriad of factors that impact the car insurance premium . The above are some of the most common factors that impact your policy premiums. Now that you are aware of these, you can better assess the car insurance premium quotes. You have control over factors such as your driving record as well as the policy coverage and can influence the policy premiums accordingly.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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