Car Insurance Premium: Definition, Influencing Factors & Tips
Car Insurance

Car Insurance Premium: Definition, Influencing Factors & Tips

A car insurance policy provides you with financial protection against unforeseen events. There are two types of car insurance covers that are available in the market today, namely, third–party car insurance policy and comprehensive car insurance policy. A third–party car insurance policy only covers you against third–party liabilities whereas comprehensive car insurance provides you financial protection against own damages too. In return, you pay a premium. Today, we will help you understand a bit more about what is a car insurance premium. We will also look at the factors that influence this premium and tell you how you can lower the costs you pay.

Car Insurance Premium Meaning

The amount of money that you need to pay for car insurance is called a car insurance premium. The premium amount can either be paid annually in full or in EMIs. Your car insurance premium is directly proportional to the coverage offered by your car insurance policy. This means that the premium you need to pay to buy a comprehensive car insurance policy will be comparatively more than the premium you need to pay for a third–party car insurance policy.

Factors That Influence Car Insurance Premiums

Your car insurance premium is influenced by several factors, such as:

  • The type of policy you buy

  • Whether you add any riders for additional coverage

  • Geographical location

  • Engine type (petrol, CNG, or diesel)

How to Reduce Your Car Premium Payments?

Here are a few tips to help you reduce the amount you pay towards your car premium.

  • Choose your add–ons carefully

    If you buy a comprehensive car insurance policy, you can include various add–ons or riders in your policy and get to enjoy extensive coverage. However, adding riders to your insurance policy also increases the premium you need to pay for your insurance policy. Hence, be mindful of the riders you add to your car insurance policy. Only pick the ones that you will actually use to keep your car insurance premium costs low.

  • Avoid making small claims

    Car insurance providers offer you a No Claim Bonus (NCB) for every year that passes without you raising an insurance claim. Hence, to get a discount on the premium you pay during renewal, avoid making insurance claims for very small amounts. Alternatively, to protect yourself from losing the accumulated NCB, you can also get the NCB protect add–on to avoid losing your accumulated discount when you raise an insurance claim.

  • Install anti–theft devices in your car

    The installation of safety devices reduces the probability of your car getting stolen. This, in turn, reduces the risk faced by the insurer to a certain extent and can possibly see you benefit from a reduced car insurance premium.

Nowadays, you can easily buy the car insurance policy of your choice online from the comfort of your home. Choose from the wide range of add–ons to customise your coverage as per your unique needs. Ensure to settle for an insurer that meets all your coverage needs and helps your breathe a sigh of relief.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

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