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Aspects That Will Determine your Car Insurance Premium

Posted by Royal Sundaram on 08 Mar 2013

As a payer, you have to know what the car insurance provider takes into account while assessing the premium you need to pay. Once you know about this you can work around them to reduce the amount without compromising on the coverage you get. Here are the factors that play a major role in deciding the premium you pay –



Personal Factors –

This is one of the important factors that determine your premium amount. Personal factors include age, gender, marital status, driving record, Occupation etc. So a woman driver will pay low premium as compared to a man, only because women are consider safe drivers. Also, the premium charged to a married man will be less as compared to someone who is single even if they have a similar driving record. Your age to works as a deciding factor, a driver under the age 25 years will pay the high premiums and drivers who are above 50 and 65 years pay the least.

Insurance Location –

Registration city plays a main role in deciding your premium amount. In case you reside in a place where the traffic is low, you are charged low premium rates as compared to people who live in big cities where traffic is an everyday story. This is because there are lesser chances of the car encountering an accident, so the insurer is running a lower risk. Also, people who live in areas where vehicle thefts are common will have to pay higher premiums.

Usability Factors –

The purpose of your car is taken into account as well. If your car is used for commercial purpose you will be charged high insurance rates. Moreover, factors which influence the cost are monthly mileage & cubic capacity – distance between your home and your workplace, the distance driven per month, the speed of the vehicle and most driven roads.

Coverage and Deductibles –

In the end it boils down to the type of coverage you avail. A policy that offers only third party coverage is cheaper as compare to a policy that offers comprehensive cover. Adding extra covers to your policy will increase the premium amount. But opting for a higher deductible will reduce your premium amount.

Discounts –

Below are the factors that are being considered for further discount in the premium,

  • Discount for membership of recognized Automobile Associations.
  • Discount for Vintage Cars (Applicable to private cars only).

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