Know How These 7 Variables Affect Motor Insurance Premium

When shopping for motor insurance, it can be tempting to reduce premium rates by choosing lower amounts of coverage or by raising your deductibles. These are the two most obvious factors that affect the premium cost of motor insurance.

Knowing what affects your premium rate can help you to make a more informed decision while purchasing insurance. In addition, it can help you know exactly what to do to lower your expenses. The cost of your premium can be calculated with the help of an online motor insurance calculator.

  1. Comparing Policies

While it is easy to look through a couple of plans and choose the cheaper one, it can be even more rewarding and contribute to your savings if you compare multiple policies on the basis of their coverage, features and premium rates to settle on a more customized and budget-friendly plan for you.

  1. Model and Make of the Vehicle

Luxury cars and sports bikes have relatively higher premiums as compared to simpler vehicles that you would normally find on roads as they have a higher IDV and cubic capacity.

  1. Insured Declared Value

Insured Declared Value is the current market value of your motor vehicle. IDV keeps on decreasing as the vehicle ages.The insurance provider determines this value when you apply for an insurance policy for the very first time. It is imperative to assess the current market value of your vehicle to avoid paying higher premium prices.

  1. Cubic Capacity of the Vehicle

Cubic capacity (cc) is essentially, the size of the engine of your car. IDV varies with time but cubic capacity does not follow the same suit. The cc of your engine is directly proportional to your premium rates. The higher the cc, the more expensive your policy.The greater the capacity, higher the premium rates, as statedaccording to the Indian Motor Tariff Act.

  1. Voluntary Deductible

A voluntary deductible is the amount you would end up paying in case you file a claim. The insurance provider pays the additional amount. A higher voluntary deductible amount means lower premium rates of your policy. Since you are paying a portion of the expenses, you received reduced premium rates. Another benefit of having a voluntary deductible is that you would try to avoid making claims in order to prevent paying for the repairs, which serves as a motivation to drive safely.

  1. Utilizing the No Claim Bonus

No Claim Bonus or NCB is the reward you receive when you have not made a single claim in the duration of your policy term. The No Claim Bonus can be utilized during bike or car insurance renewal wherein you are eligible to receive a reduction in your premium rates by a certain percentage. The percentage of reward increases with the number of consecutive years for which a claim is not made.

  1. Managing Add-On Covers

The base coverage of your policy can be extended with the help of add-on covers. They help in customizing your coverage to create a policy that suits your requirements. Add-ons contribute to your premium rates, which is why you must choose them with some thought and consider whether they are necessary. Bajaj Allianz Motor Insurance offers add-ons such as 24×7 Spot Assistance, lock and key replacement cover, accident shield for occupants of the vehicle, replacement of consumable expenses and more.