Every car owner wants to keep his car in the best shape possible. As a proud car owner, you must understand the importance of protecting your vehicle with an insurance policy. Unfortunately, the number of road accidents each year reaches around five lakhs in India. The increasing number of cars on the road makes it essential to safeguard your vehicle with car insurance.
You buy a car insurance policy at the time of purchasing a car. While doing so, it is crucial to understand the terms and conditions of the policy. You do not want to choose a policy that is not suitable enough for your car. It can be the cause of a major financial setback in the future.
Therefore, you must understand what factors affect insurance premium rates. This will help you make an informed decision and save you from future troubles. You can know more about the car insurance premium using online calculators.
The insurance company considers several things before deciding the insurance premium, such as its age, brand, make and model. Let’s take a deeper look at how your car’s age impacts its premium:
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1. IDV
The Insurance Declared Value (IDV) is defined as the current market rate of a vehicle. It is the maximum amount of compensation provided to you in case of constructive total loss or theft of your car. It is calculated by deducting the depreciation from the manufacturer’s selling price.
The percentage of depreciation to the IDV increases with the age of the car. A new car will have a higher IDV than an old car. For vehicles older than five years, IDV is calculated by a mutual agreement between the insurer and you after the assessment of the car by the dealer.
Therefore, you must do your research before agreeing to the IDV set by your insurance provider.
2. Car’s Condition
Apart from the IDV, your insurance provider will also consider other factors, including your car’s overall condition, when deciding on the insurance premium.
An older car generally costs more to fix than a new car and is also likely to get more damaged in an accident.
Your insurance provider will carefully assess the state of your car before arriving at an insurance premium. The car’s size and the engine type can also be considered. The best way to get more details in this aspect is to connect with an insurance provider and clarify your doubts.
3. Usage Pattern
Different insurance companies provide car insurance at different rates. Fortunately, some factors that affect the premium rate are under your control. If you drive safely and have no record of violating traffic rules, it can work in your favour.
Similarly, your profile as a customer can influence the insurance premium too. For example, it is observed that married people are more likely to drive carefully and, therefore, may get a discount.
The regularity of usage and your location also play a role in calculating the car insurance premium. The more you use your car, the higher is the risk of meeting with an accident. You may get a discount from your insurance provider in case you do not file any insurance claim during the policy tenure.
Many people feel inadequately informed when it comes to the terms and conditions of a car insurance policy. It may come as a surprise to them that the insurance provider also considers a car’s age while determining the premium. It is best to do your homework while selecting the right policy for your car.
Insurance cost is a significant part of owning a vehicle. It does not matter if your car is old or new; the importance of car insurance remains the same. Protect your vehicle with the help of a reputable car insurer, such as Tata AIG to have a stress-free driving experience always. Use their online car insurance premium calculator to get an idea of the estimated premium that you need to pay.
