5 factors that affect the cost of your car insurance premium!

What’s the number one thing on your mind when buying car insurance? Protection, isn’t it? Well, unfortunately, for many it is the price. This is why many individuals end up buying third party insurance. It is the most affordable coverage you can buy for you vehicle and it also serves the minimum legal limit. While these plans are light on your pocket, they are also extremely light on protection. In fact, they do not even cover your own car.

This is why it is important to buy comprehensive car insurance. Now, the only problem is that these plans can be a little expensive for few. Keeping this in mind, the following article will highlight 5 of the factors that determine the cost of your plan. Hopefully, you can use this information to smartly reduce your spend on car insurance.

1.  The IDV of your vehicle.

The IDV plays a major role in deciding your car insurance premium. IDV stands for insurer declared vehicle and it is the current value of your vehicle. In case of total loss of your vehicle, the insurance provider has to provide compensation equal to your car’s IDV. Therefore, the higher your IDV is, the higher your premium is.

While your car’s IDV is set the insurance provider, it is possible to set a lower IDV to enjoy lower premiums. However, remember that a lower IDV also means a lower payout in case of a total loss of your vehicle.

2. Your driving record.

Yes, that’s right! Your driving record also plays an important role in deciding the premium of your car insurance policy. If you have a history of accidents, you could be provided with a higher premium amount. On the other hand, if you have a clean driving record, you should receive a better premium. Also, going forward there could a be new law implemented where breaking road rules could also cause your premiums to rise whereas if you driving record clean you will give you access to incentives and price reductions.

3. The make and model of your car.

Sports cars generally have higher premiums. As do car with a higher cubic capacity. Fuel type also plays an important role – petrol cars enjoy lowest premiums. Diesel cars are known for maintenance issues and therefore have higher premium. CNG have the highest premium as the plan has to cover the gas tank as well.

4. Safety features.

This will be music to your ears – the premiums of your car insurance policy can be reduced by installing safety features. Also, cars that come with pre-installed safety features such as a car lock or an anti-theft system generally have lower premiums than those that don’t have these features. Cars today are equipped so many advanced features such as GPS that could help significantly lower your premium.

5. Frequency of claims.

This is another thing in your control. Refrain from making claims and you enjoy a discount on your premium. This discount is called No Claim Bonus. It can help you unlock discounts up to 50% on the premium you pay. You should be able to enjoy the feature as long as you refrain from making small claims.

These were some of the most important factors that decide the premiums of your car. Now that you know what determine your premium, you can make the right moves to keep your insurance outgo to a minimum. Good luck and drive safe!