Car Insurance: These factors determine the premium

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The importance of car insurance policies is quite well-known to all of us. As per law, car insurance is compulsory. Apart from being a legal obligation, having car insurance has its benefits. It covers your car financially in case there is damage or an accident. To purchase or renew a car insurance policy, you have to pay an amount to the insurance company. The premiums paid towards car insurance sometimes act as a financial burden to many people. There are some factors that will affect your car insurance premium. If you have knowledge about these, it will help you.

Here are some factors that play a key role in determining car insurance premium:

Location

Location is one of the primary factors that decide your car insurance premium. For instance, insuring a car in a metro is going to cost more than insuring one in a tier III city.

Personal factors

Personal factors are also a big criteria that affect car premiums. Women pay less premium than men. A married individual has to pay a lower car insurance premium amount compared to a single person. Not only that, if you are a new driver, there are chances that you may have to pay more for car insurance.

Car types

The class and model of your car is one of the determinants for the car insurance premium. Certain types of cars cost more to insure. The premium for insuring a luxurious sedan is going to be high as compared to a hatchback.

Engine type

Type of engine of a car also decides the amount of a car insurance premium. If you buy a diesel car, then you might have to pay a higher premium because diesel vehicles are costlier than petrol vehicles.

Safety features

Car insurance premiums also depend upon the security system installed in the vehicle. Protecting your vehicle with an anti-theft device might fetch you a discount on insurance premium.

Coverage

Depending on the scope of coverage that your car requires, the premium for your car insurance could be determined. Usually, opting for comprehensive car insurance is better than third party insurance but it will incur a higher premium.