You are required by law to buy insurance for your car. Not only should you be protected against theft and damages due to accidents or natural calamities, but also from third party liability (just in case you are liable to pay damages for injuring a third party during an accident). Read on to learn how to choose and buy the best car insurance online.
How is Premium Determined?
Your premium depends on the following factors:
a) City of registration and domicile: Premiums are higher for urban areas with dense populations, or for areas near highways.
b) Make and model of the car: Large vehicles such as sports utility vehicles (SUVs) or commercial vehicles have to pay higher premiums as they tend to have more claims made against them.
c) Fuel type (petrol or diesel): Generally diesel vehicles have a 10%-15% higher premium.
d) Age of the vehicle: For vehicles less than five years old, depreciation is applied based on the years of use to the ex-showroom price to find the Insured Declared Value (IDV). For vehicles older than five years, the market price is taken as the IDV.
e) Claims history: If the car owner has previously claimed an insurance payout, then the premium will be higher.
f) Driver history: The age and profession of the driver is taken into account. If the car has multiple drivers, the premium for that car’s insurance goes up.
How Can I Reduce My Premium?
When buying vehicle insurance online, compare the rates and coverage offered by the different insurance companies. Also, take into account the claim settlement ratio. You can then choose the cheapest one given the coverage offered, and you are all set for online car insurance.
a) Voluntary deductibles: If you volunteer to pay a certain deductible, or can settle small claims on your own without claiming insurance, the cost of the premium for your car’s insurance can be reduced.
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