Ever wondered how your car insurance provider quotes the premium? Whether you decide to involve agents or buy car insurance online in India, it is a sagacious decision to understand how car premiums are calculated by the insurer.
Read on to find out about the various factors that influence the cost of premiums while purchasing the car insurance cover.
The Sum Insured or Insured Declaration Value
The insured declared value or sum insured is the actual value of the car as derived by the insurer. It is this value for which an insurance holder pays the premium. IDV applies only for comprehensive covers and must be checked without fail while purchasing the insurance. Expensive gadgets and CNG kits further add to the value of the vehicle.
Location Of Vehicle Registration
India has been divided into two zones, A and B, for the purpose of vehicle registration. Zone A includes the metropolitan cities along with a few other tier 1 cities like Pune, Bangalore, Hyderabad and Ahmadabad. The rest of the country falls under Zone B. Insurance premium of vehicles registered with Zone A cities is more expensive as the chances of claim is higher in these places.
Age Of The Vehicle
The older the vehicle, higher is the insurance premium as the risk of break down is also much higher. The general age brackets for vehicles in India include, less than 5 years, between 5 and 7 years and above 7 years.
The Cubic Capacity Of The Car
The size or volume of a car’s engine is referred to as its cubic capacity (CC). The greater the cubic capacity, the better is the acceleration and speed. Insurers charge these high-end vehicles a much higher premium than the smaller ones. Cars as low as 1500 cubic capacity demand the lowest premiums and the more sophisticated brands that surpass the 2000 CC mark are insured for a lump sum.
NCB or No Claims Bonus refers to the additional discount points earned on the own damage premium if no claims were made during the previous year. NCB of maximum 50% can be accumulated over a period of 5 years.
With an increasing population and dwindling car prices, safety becomes a top priority. Car insurance is no more a luxury or need but an absolute necessity for the Indian roads. Ensure that you know the knacks of obtaining the suitable plan within your budget. Visit this website if you want to buy car insurance online in India.