What factors influence car insurance premiums for SUVs and sedans 30^th June 2022

Driving a car without insurance is considered illegal in India. Automobile owners weigh the pros and cons of different options available in the policy market. Before buying car insurance, people consider various factors such as covers, add-ons, services, premiums, etc. In this article, we will be talking about premiums and how they can vary depending upon the kind and size of your car.

What is a premium?

A premium is an amount you pay your insurer to keep your policy valid. The duration of payment can vary from monthly to quarterly to annual payments.

What factors affect the premium?

1. Model and make of your vehicle
2. Engine capacity
3. The driving experience of the policyholder
4. Age
5. Location

Besides the points mentioned above, previous claims and traffic violations can also affect your insurance premium.

We better understand what premium is and how they can be affected. Let's look at premiums for SUVs and sedans.

1. The make and model:

Car insurance can vary significantly depending upon your car's size, make, and model. If you intend to buy an SUV or a sedan, remember that these models are charged the highest premiums. Putting in ample research into the car model and the respective insurance premium is essential.

2. Driving record:

Another crucial factor that decides the total cost of your premium is the driving experience. If you have no records of accidents, then the premium rates can be significantly lower. Even a minor skip such as running a red light or speeding ticket can affect the premium rates too. Insurance companies analyse your driving records to understand the risk associated with your driving and how likely you are to get into accidents. The more the chances of accidents, the higher the premium rates.

3. Location:

If you live in an area with high crime rates, the insurers tend to charge higher premiums.
The premium amounts can be excessive if your locality is prone to crime and vandalism.

4. Coverage and add-ons:

Coverage and add-ons are the services insurance companies provide when you buy an insurance policy from them. If you opt for the basic package and maintain a good driving record, the insurer will likely settle for a lower premium.

5. Age of the vehicle:

The age of your vehicle is another factor that insurance providers consider when offering insurance. The depreciation value of your vehicle increases with time. Adding to that is the wear and tear that the vehicle went through over the years, reducing the value of the car. Therefore, older cars will have a lesser premium.

6. Engine capacity:

The CC or the engine capacity affects the premium and higher the CC, higher the premium. And since SUVs and sedans have higher CC, their premiums are also higher.

7. Engine type:

Cars running on petrol have lesser premiums than cars running on diesel. A vehicle running on CNG has a higher premium than diesel engines. If you intend on adding a CNG unit to your sedan or SUV, keep in mind that the premium costs will increase significantly.

8. Modifications:

Modifications that alter the look or performance of your car will have a higher market value. This, in turn, will increase the cost of the premium on the vehicle. The look and feel of the car is a lesser talked about factor when it comes to insurance prices.

These are some factors that affect the premium of your insurance coverage. Irrespective of the kind of vehicle you buy, the points mentioned above determine the overall cost of your insurance. Before finalising your car insurance renewal, do not forget to look through various insurance providers and their services for a price best suited for your needs.

Click HERE to know more about car insurance renewal.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.