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Factors that Affect Car Insurance Premium
A car insurance provides a financial backup for any unforseen damages to ones vehicle. Insurance policies have two basic covers the Personal Accidents cover and the Third Party Liability. Policies which include a third cover known as the \’Own Damage cover\’, are known as comprehensive car insurance policies. When you purchase either car insurance policy, there is an amount you have to pay known as the premium. There are a lot of factors that determine the premium.
The make, model of your vehicle determines the car insurance premium to a large extent. The vehicle value known as the Insured\’s Declared Value (IDV) is determined on the basis of the car details you furnish. This is the amount which is returned to you in case of a total loss of your vehicle. Hence providing the right information about the vehicle you are getting insured is very crucial.
The premium is also dependent on the cubic capacity and fuel type of the vehicle. The vehicle cubic capacity is categorised as exceeding 1000cc, between 1000cc to 1500cc and exceeding 1500 cc. Furnishing the wrong fuel type can pull up or push down the premium. The age of the vehicle too plays an important role. Year of manufacture and registration date is used to ascertain the age of your car and the corresponding rate of depreciation. The
car insurance price
is then accordingly adjusted.
City of registration also matters when your premium is being calculated. Insurance companies divide the cities into zones like Zone A and B depending on their geographical location. Vehicles of same make/model, cubic capacity and fuel type, but from different zones can have varying premiums.
Car insurance companies also offer various add-ons for your car insurance policy like the Depreciation Shield, Engine Protector, Co-passenger cover. All of these have their own special advantage but come at their own price. Depending on which cover you choose your premium may increase.
Your premium is also directly related to the discounts you chose to avail.If you chose a voluntary deductible, you opt to pay a certain amount from your own pocket when a claim arises. Your premium will shrink depending on the amount of voluntary deductible you volunteer to pay.
The No Claim Bonus is another way of reducing premium. The NCB is a discount offered on premium depending on the number of years without claim. The more the years without a claim, the more is the dicount you can get on your premium. Policy holders can save upto 50 % and more on their premium because of the NCB.
With the advent of insurance online, the need for intermediaries (agents) and manual processes is being done away with. The elimination of these intermediaries translates into monetary savings for the insurers which they in turn pass on to the customers. As a result many companies offer various options online to reduce your premium. If you purchase a car insurance online, you can avail the various options and reduce your premium.
The article is contributed by Deepa, a professional content writer. Currently, she writes to provide relevant and useful information for readers. For further information on
Car insurance premium
, please visit www.berkshireinsurance.com