Factors to determine your car insurance premium

After browsing through catalogues, visits to car showrooms, advice from friends, and a thorough check of your financials, you have finally zeroed in on the best car insurance you wish to buy. While coming to the consensus on best car insurance suitable for your car you would naturally have taken into account the insurance premium you pay that will depend on the model of the car, the security and safety features installed in the vehicle, the driver's profile and whether the car is for commercial or private usage.

According to automobile industry experts, so far the premium was focused more on the vehicle and less on the user. However, this is bound to change soon, as the premium will depend on the parameters that lower the risk. So, more user-specific factors which influence risk will be considered in future. The article provides you some factors that will impact the premium of your car insurance in the coming years and will help you choose the best car insurance suitable for your needs and requirements.

Distance Covered

The number of kilometres you add up each month will be an important determinant. It is because less travelling is directly rational to lower risk. So, if a car is driven less than 5 km a day, say, to drop your kid to school and back, it will be perceived to have lower risk than a vehicle that is driven about 50 km each day, say, to and from your office. A device called odometer has to be installed in the car to be able to track. It might take some time to include mileage as a factor for deciding the premium because the insurance companies are yet to work out the economics of this.

Credit history and behavioral patterns:

Internationally, insurance companies have linked credit history and customer behaviour to premium amount. A credit score means more authentic information about the individual's track record regarding payment and defaults. These credit score may be used in the next 2-3 years as insurers are still to develop better fraud control mechanisms. Behavioural patterns may be derived from choices made by the individual, such as the colour of the car.

City Choice

When it comes to the premium being determined by geography, currently, the classification is not too granular. As of now, it is divided into two zones — A and B. Zone A includes Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi and Pune, whereas the rest of India falls into Zone B. The vehicles in Zone A are considered to be more vulnerable to theft and accidents and, therefore, their premiums are higher. Ideally, the classification should be on the basis of cities and there should be demarcations within the city too.

Home ownership

Owning a house may help you get the best car insurance premium. Reason is simple; a home means you have parking vicinity. If it’s safe and sound it becomes an important parameter in deciding the premium rates. If taken into account, it can translate into lower rates for the customer. Other factors, such as car maintenance and driver's gender, will also be important. So, if you have been getting your car serviced at an authorized service centre and have been maintaining it properly, you may be able to get a discount on the premium.

Top-Ups

While these factors are yet to come into effect for calculating the premium, a multitude of add-on covers has been launched for creating the best car insurance policy for your car. Add-on covers bridge the gap between actual financial losses arising due to an accident and the amount covered in the base policy. However, such covers can increase the premium rates by 1-2% of the total sum insured.

A Guide to Choose Your Car Insurance Policy!

Buying car insurance is not only a legal requirement, but also a wise decision to keep your valuable asset safe and secure. It is not correct to just buy any policy with the lowest premium. The focus should be on buying the best auto insurance for your vehicle following a clearly thought-out plan based on practical facts.

There are certain considerations to be kept in mind when you decide to buy a plan for the car so that your hard earned money and investment in the car as well as the policy doesn’t go waste.

Let’s share with you a few pointers that will help you massively while you go scouting for an insurance cover for your car:

1) Selecting Insurance

There are two types of car insurance in India:

(i) Third Party Liability Insurance

This is a compulsory plan for all vehicle owners and it covers damage to property, accidental death and injury to a third party to the contract. The first two parties are the insured and the insurance provider.

(ii) Comprehensive Plan

This is a plan that may be bit expensive, but it covers damage to own vehicle as well as the third party obligations. It also covers theft and damages caused by events like fire, earthquake, cyclones, floods etc.

2) Premium

This is what interests most people while buying auto insurance. This amount is calculated based on certain factors, which are described below:

(i) Based on Vehicle

Depending on the age, make, fuel type, etc. of the vehicle, the premium amount is established. Certain vehicles like SUVs or vehicles running on diesel compared to petrol command higher premiums than their counterparts. Also, at the time of renewal, the age of the vehicle and its depreciation play an important role while calculating premiums. You have to get your car properly inspected so as to arrive at a figure that works to your advantage, providing adequate cover at the lowest possible premium.

(ii) Based on Location

The place where you live also affects the premium on your car insurance policy. For example, if you’re living in a part of the city where auto theft is rampant, then chances is that the premium will be higher. Also, locations like dense localities, places near highways, etc. attract higher premiums.

(iii)  Based on Claims History

If you have filed for claims in the previous year, there is a good possibility that when you go for renewal, the premium charged to you would be on the higher side. Unclaimed policies lead to no claim bonus the following year and this policy is followed by all insurance companies.

(iv) Based on Driver

A car that is driven by multiple people may attract a higher premium compared to single-driver run car. The idea of car insurance is not only to make life easy for you, but also to cover all possible risks for an insurance provider too.

3) Ways to Reduce Premium

There are some smart decisions that you can take to reduce the premium on your car insurance policy. If you decide to pay for some petty expenses out of your pocket and buy a car insurance policy only for major damages, you can reduce the premium amount substantially. Also, if you buy a car within built enhanced security features, approved by Automotive Research Association of India (ARAI), you stand to get discounts from your insurance provider. Of course, not filing claims for consecutively for 3-4 years can lead to a no claim bonus of as much as 40-50% in the fifth year.

4) Precautions

There are some common mistakes we commit while buying the car insurance. First of all, reducing the value of the car while declaring in the form. This might help initially to reduce the premium, but in case of an accident, this proves real costly. Hence, always try to provide the right value of the car to gain maximum benefits at the time of an accident. Also, never forget to renew your policy on time. An insurance provider usually provides a grace period of a week from date of expiry of policy. Post that, you stand to lose discounts and other premium benefits on the new policy.

Car insurance in India is a legal binding and rightly so. However, whom to buy it from and how, depends entirely on the buyer. Appreciate this freedom of choice and do a thorough research to buy the best policy for your car.

[Source: https://carinsuranceonline2015.wordpress.com/2016/07/04/a-guide-to-choose-your-car-insurance-policy/]

motor insurance

5 Steps to getting car insurance

The best Car Insurance in India

Car Insurance is a tricky business, as most of the policy buyers aren’t aware of what needs to be done and what has to be avoided. Therefore, taken up this initiative to educate potential policy buyers about the merits of having a best car insurance policy. Now before we get into any details, let us first tell our readers that having a car without insurance is illegal. So you cannot drive a car in India that is not covered under a valid insurance policy.

Now, there are two types of car insurances:

Third-party insurance: In this case, the insurance company pays all the damage that is caused to the other party’s car, property, or humans.

Car-insurance

First-party insurance: This is the one where in the insurance company pays for all damages to your own as well as other’s property. This is relatively more expensive as there are greater benefits. The best (ideal) option is the first-party insurance, and Car Insurance offers is called a ‘Car Shield’ plan.

Car Shield has been tailored to make both you and your car safe. Loss of or damage to your car by the way of a fire incident or theft is also covered.

Cover damage to your car, theft of parts, and/or all your accessories.

Choose from a host of add-on covers for added protection and coverages, including Depreciation Waiver on plastic or metals parts in case of partial loss or claim, replacement of windshield glass without affecting your No Claim Bonus, insuring your car for 100% of the list price, and ability to receive back the total invoice value of the car in case of total damages or theft.

Optional Personal Accident cover of up to INR 2 lakh for co-passengers.

Third-party cover up to INR 7.5 lakh legal liability to paid driver.

Car Insurance is also available online and best car insurance are available.

Free vehicle inspection at your door step, in case of break in insurance, and facility to buy online within 24 hours.

We facilitate cashless facility all over India.

Get 24×7 Roadside Assistance in case of emergencies due to accidents.

Dedicated 24X7 helpline in case of claim.

Get personal care with a dedicated personal relationship manager to guide you in case of an accident and to take you through the claims process.

Speedy authorization of repairs to get your car back on road quickly.

Benefits of Renewing/Buying Policy Online:

Instant Policy.

No documents.

Online assistance.

Pay using debit/credit card.

Special Model wise Discounts on Own Damage Premium.

Transfer No Claim Bonus (NCB) from other insurance company on renewal

Source: [http://blogs.rediff.com/carinsurance/2016/07/01/best-car-insurance/ ]

How Car Insurance Policy Helps You Save Your Money

The moment someone talks about getting the car insured, most people have a tendency to consider it as yet another cost. It is like an expense that should be kept at the minimum. People scramble to buy policies that offer really low premiums as car insurance is never a priority, but an unwanted liability. The truth is so very different though! A car is a valuable asset and despite losing its value every year due to depreciation, getting it insured can still help you save money, as long as you own it.

Presenting to you some of the most important reasons why having your car insured is actually monetarily beneficial for you and can save on money too:

1) Legally Compulsory

Whether one likes it or not, it is legally mandatory to have your car insured in India. If you are caught driving your car without insurance, you’ll be liable to pay fines and penalties and repeated offenses can lead to bigger punishments under the law. That’s why every car company sells their product with an insurance coverage of at least a year after which the onus lies on the owner to renew car insurance.

2) Accidental Claims

No matter how safely you drive your vehicle insurance, an accident can happen anytime, anywhere, if not by your mistake then may be due to some other driver’s. In such a scenario, having a comprehensive insurance coverage can help you get your car repaired without incurring expenses from your pocket. A car is a costly asset and maintaining it or repairing it can be a costly affair. Insurance helps you to keep such expenses in check.

3) Damage To Third Party

If the accident happens due to your fault, not only will you have to take care of your car, but also pay damages to the affected party that may run into a few lacs. This is where a car policy can come to your rescue. It will provide for repair of the affected person’s car as well as pay compensation in case of bodily damage to the affected person in terms of hospitalization expenses, doctor’s cost, surgery expenses, etc. Whether there is a loss of limb or death, the car policy covers such third-party claims relieving you from incurring such back-breaking expenses. In short, it shields you from all third party liabilities and expenses while at the same time ensuring that your damages are also equally provided for.

4) Natural Calamities

Rains, floods, earthquakes, fire, etc. are some disasters over which no one has any control. Imagine you bought a brand new car and within a month it got submerged in flood waters. Scary thought, right? With car insurance, you don’t have to worry about paying expenses to get your car back in brand new shape.

5) Man-made Disasters

These would primarily include burglary, theft, riots, etc. and with an increase in such events in almost all the cities of the country, you should not lose your sleep over it. If you have bought the right car policy, you can be assured that the insurance company will cover you for such damages or theft and your hard-earned money won’t go down the drain. A few rupees for insurance premium can help you save lacs in times of need!

Hope this helps you understand that getting your car insured is a necessity rather than a compulsion under law. It is for your own good. When you buy the car, the company sells it to you with insurance valid for one year. After that, it becomes your duty to renew car insurance and continue enjoying the benefits as it becomes your friend hell bent on saving your money!

[Source: https://www.comparepolicy.com/blogs/car-insurance-policy-helps-save-money/]

Don't let dealers take you for a ride on insurance world

Car insurance is mandatory by law in India. The optimum cover that you need to hold is the third party insurance. With number of companies introducing lucrative insurance packages and competition getting stiff each day some dealers and manufacturers come up with cashless car insurance for customers during festive season. They say that they will take care of the premiums for the dedicated tenure and you enjoy the benefits on motor insurance. The offer entices buyers as it helps them save money on the premium on this mandatory cover. However, according to automobile industry experts it is not possible to offer motor policy free of cost. You need to understand the pros and cons along with the hide charges behind your car policy. Regulations do not permit motor policies for tenure of more than a year. The dealers merely give an undertaking to fund the premium when the policy comes up for renewal. They might have made provisions for these payments.

Dealers bundle these policies with the entire sales package, and offer to pay the premiums instead of providing a cash discount. Nowadays for flexible sale they often put across such advertising tactics to provoke customers in buying motor insurance online. Honestly speaking, these are not free insurance covers, as an insurance policy can never be offered free. These policies are like plain vanilla policies without add-on covers like depreciation, return of invoice, etc. You need to understand the scope of coverage being offered before signing up. Besides, since the dealer would have tied up with a particular insurance company to offer the package, your choice will be restricted.

With the advent of internet insurance world has become transparent and simple. It is advisable you can compare car insurance features, benefits, discounts etc. and then buy motor insurance online on the spot. While buying insurance online pricing could be better than what is otherwise available in the market. Also, in the event of a claim, the dealer is likely to be more supportive and manage the liaison with the insurance company and surveyor. It is advisable customers should take a close look at these policies before signing up for them.

One more concern is most car insurance policies offered free do not carry the necessary riders to provide wholesome coverage for a car. The key factor to consider is the coverage of the policy in terms of riders like depreciation shields, engine protector, 24X7 spot assistance and vehicle replacement advantage. That is why you should study the policy to find out whether it is merely a third-party cover, comprehensive policy or a fully-loaded package with add-on covers. The customer needs to study the coverage closely. It is important to have a policy on zero depreciation as the deductibles could be very high on claims under such a policy. So, compare motor insurance online available in the market with the bundled cover being offered to you before making a decision.

Also, if you are signing up for policy, find out how the dealer plans to honour the commitment. Motor insurance online policies offer various benefits, discounts and no-claim bonuses. Find out how a claim will affect the arrangement. Things could get complicated, so it is better to bargain for a cash discount instead of the bundled cover, if possible. A customer, who does not make a claim in a particular year, gets a no-claim bonus (NCB), which lowers the premium for the subsequent year. Similarly, if he or she makes a claim, he or she needs to pay a higher insurance premium.

[Source: https://carinsuranceonline2015.wordpress.com/2016/06/29/dont-let-dealers-take-you-for-a-ride-on-insurance-world/]