Engine Capacity
The capacity of your car's engine will affect its insurance premium. The higher the engine's cubic capacity, the higher the premium. The Insurance Regulatory and Development Authority of India determines third-party insurance premium rates in India based on the engine's cubic capacity.
Insured Declared Value (IDV)
IDV refers to the current market value of your car after adjusting for depreciation. IDV for car insurance is the total value that you can claim in case of theft or complete damage to your car. Cars with higher IDV attract a higher premium.
Insurance Coverage
The type of car insurance coverage is a significant factor in determining the cost. Third-party, standalone own-damage, comprehensive and zero-depreciation will affect your premium differently.
Add-ons
Add-ons offer enhanced coverage. However, they are available at an additional yet reasonable cost. The premium will increase based on the type and number of car insurance add-ons included in your policy.
Age of the Car
The IDV for car insurance will reduce with depreciation as your car ages. This means that a brand-new car with a higher IDV will incur a higher premium than an older car.
Car Model
Every car model has distinct specifications that determine premiums. These include safety ratings, repair expenses, and the cost of purchasing specific parts. These factors shape the risk profile for your car, which in turn affects your policy premium.
Modifications to the Car
Your car's engine cubic capacity, make and model, accessories, and other specifications affect your premium. Therefore, modifying your car to affect these factors will increase or decrease the risks involved and, apparently, the premium. Modifications that increase the risks will attract a higher premium. On the other hand, if more safety accessories or features are included, your premiums can be lower.
Claims History
Claims history is yet another important factor affecting your policy premium. If you have not registered a claim during the previous policy year, you are eligible for a No-Claim Bonus. A no-claim bonus in car insurance provides progressive discounts that reduce your renewal premium for every claim-free year.
Deductibles
A car insurance deductible is the percentage of the claim amount that you will pay out of your pocket. If you choose a higher voluntary deductible in car insurance, you can benefit from a lower premium. However, a higher deductible means you will bear a higher proportion of the car insurance claim. Therefore, ensure that you strike the right balance based on your affordability.
Fuel Type
Certain fuel types incur higher repair costs for specified parts. Additionally, the fuel type determines the car's market value and, thus, its IDV. For this reason, they can increase your four-wheeler insurance premium.
Geographical Location
Suppose you drive your car frequently in an accident-prone zone, flood-prone zone, or other similar riskier areas. Your car insurance premium will increase because of the higher probability of claiming insurance for car damage.
Anti-Theft Devices
Anti-theft devices installed in your car can prevent unauthorised access and theft. By reducing the chances of theft, they can also reduce your car insurance premium.
Car Insurance Modifications
Any modifications to your coverage will affect your four-wheeler insurance premium. Common modifications include modifying add-ons, changing IDV, using NCB discount or losing NCB.