The premium that you’re required to pay towards a car insurance plan can vary depending on multiple factors. Therefore, when browsing through online car insurance quotes, it is imperative to take into consideration all of the factors that have an impact on the premium. Here’s a quick look at some of the most important points that you need to know about insurance quotes.
- The Type of Insurance Policy
Firstly, the kind of car insurance policy that you opt for can hugely influence your online car insurance quotes. In India, you can opt for either of these two types of car insurance – third-party insurance or comprehensive insurance.
A third-party plan is designed to only provide coverage for expenses that you incur for settling third-party liabilities that arise as a result of an accident. Since the coverage is quite limited, the premium for such plans also tends to be quite low.
On the other hand, a comprehensive policy is designed to offer a more complete coverage. Such plans provide coverage for both third-party liabilities as well as the expenses that you incur for repairing your vehicle that’s damaged due to an accident. Since the coverage on such plans is far more comprehensive in nature, the car insurance quotes tend to be far higher than that of third-party plans.
- The Insured Declared Value
Also known as IDV, the primary purpose of Insured Declared Value is to assign a value to your car. In the case of theft or a total loss scenario, car insurance companies are only obligated to pay the IDV of the vehicle at the time of the untoward incident.
The insurance company automatically assigns an IDV to your car based on the age of the vehicle, after accounting for depreciation. However, this value can be changed by the insured (policyholder) at the time of policy purchase. You can opt for a higher IDV, in which case you would receive a higher compensation, or choose a lower IDV, which would lower your compensation.
The Insured Declared Value of your car has a profound impact on your car insurance premium. The higher the IDV you choose, the greater your car insurance premium quotes. And on the contrary, the lower your IDV, the lower your premiums will be.
So, when choosing an insurance plan for your car, you should always strive to select the perfect IDV for your vehicle. This will ensure that you receive the right amount of compensation, while simultaneously preventing your premiums from getting unaffordable.
- The Riders
Riders are optional add-on covers that you can opt for over and above your base car insurance plan. These covers are designed to provide additional benefits that enhance the coverage that you receive over and above that of the base plan.
Some of the add-on covers that car insurance companies typically provide include NCB protection cover, zero depreciation cover, consumables cover, return to invoice cover, roadside assistance cover and engine protection cover, among others.
That said, here’s something that you need to know. These riders are not offered free of cost and require you to pay a nominal additional premium over the base insurance plan’s premium. Therefore, opting for many such riders can end up increasing your car insurance quotes by a significant margin. It is advisable to only opt for the add-on covers that you deem absolutely necessary. This way, you can keep your premium affordable while taking advantage of the enhanced coverage.
- The Tenure of the Plan
The tenure of the insurance plan also has a major effect on the car insurance premium that you’re required to pay. Currently, you can opt for car insurance policies with a maximum tenure of up to 3 years.
One of the major advantages that you get to enjoy by opting for such long-term multi-year car insurance plans is the lower per-year premium. Since you’re essentially purchasing for multiple years, the premium is locked in and doesn’t increase with each passing year, which is the case with single-year plans.
That’s not all. Car insurance companies usually tend to offer premium discounts on long-term policies as well, which can lower your overall cost further.
- The No Claim Bonus
The No Claim Bonus, also known as NCB, is a discount on insurance premiums that insurers offer for not making a claim during a year. The percentage of discount that you’re eligible for starts at 20% for the first claim-free year and increases with every subsequent claim-free year till it reaches the cap of 50%.
However, the NCB discount is only available on comprehensive car insurance policies. Also, keep in mind that No Claim Bonuses are linked to the policyholder and not the car. This means that you can utilise your accumulated NCB discount when you get a new car. If you have any accumulated NCB at your disposal, make sure to use it to reduce your online car insurance quotes.
- The Voluntary Deductibles
The voluntary deductible is the amount that you’re required to pay from your pocket before the car insurance benefits kick in. Just like the IDV, you can also select the amount of voluntary deductible that you’re willing to take on at the time of policy purchase.
The higher the deductible you choose, the lower your insurance premiums will be. And on the contrary, the lower the deductible, the higher your premiums. So, this is something that you should take into account when shopping for insurance for your car.
Conclusion
Now that you’ve seen the six major factors that influence car insurance quotes, use this knowledge to land the perfect insurance policy for your car. That said, remember to consider the number of network garages and the performance of the insurance company as well when purchasing an insurance plan.
