Auto insurance premium refers to an amount that is paid by the car owner or insured periodically to the insurance company for the purchase of an auto insurance policy. The auto insurance policy provides financial protection for your quad against any physical damage or injury resulting from a collision and against third party liability for which the insured pays the premium.
A car insurance premium is affected by many different factors such as:
Engine displacement: The car you own or drive is also a determining factor in your car insurance premium. The engine displacement (cc) of the vehicle varies and this determines the premium of car insurance coverage. As a general rule, the higher the cc of your car, the higher the premium will be.
Age: There will be more premium charged for the new car compared to an old vehicle. This is simply because more coverage would be needed to insure a new car than any older vehicle.
Fuel: There will always be less premium charged for petrol or diesel cars compared to any CNG car. Indeed, the maintenance cost would be much higher than any petrol or diesel car.
Insured Declared Value (IDV): IDV refers to the current market value of the vehicle, which is further administered by depreciation. So, if the IDV is higher, there are chances of having a higher premium and vice versa.
Type of cover: Full coverage would always have a higher premium attached to it rather than a third party premium. As comprehensive coverage provides greater coverage and also allows you to add add-ons that will attract more premiums rather than just the basic car insurance policy.
Car registration location: Well, many people don’t know this, but location is one of the crucial factors that determines the amount of premium that needs to be paid to the insurance company. For example, the insured car belongs to an urban area or a highly populated city such as a metropolitan city, then the premium rates would be higher. Indeed, the risks of claims are greater due to traffic, congestion, vandalism and other problems.