July 25, 2024

5 factors that affect car insurance premium

If you take investments seriously, you will find engaging in discussions with friends over the same. Many times, while discussing investments, you may talk about insurance policies. Through the discussion, you find that while both have opted for the same car insurance provider, you pay a different premium, even though both bought the policy around the same time. Several factors go into buying the insurance.

Following are the factors that affect your four-wheeler insurance premiums –

  • Several claims:

Your insurance premiums increase if you make too many claims on your car policy. As the claim number increases, so does the liability of the insurer. You could be an individual who files for claims for the smallest of the reasons, costing the insurer. This allows the insurer to increase the insurance premium. Your claim history and records play an essential role, thereby increasing the premium amount.

  • Traffic violations track record

Of you get caught for driving without a license, pollution under control certificate and valid insurance are considered as a violation of traffic rules. Other traffic violations include speeding, driving without a seat belt, speaking on the phone, breaking traffic signals, drink driving, and other such mistakes. They are considered a serious crime by the insurance companies. They make you a risky candidate, and hence, the insurance premiums tend to be high.

  • Change of primary driver

All the insurance firms ask you to register a primary driver at the time of buying the policy. If the name of the primary driver gets changed during car insurance renewal, the insurer has the right to increase the premium amount. This primarily happens when the primary driver is a newbie. Since they are inexperienced, the chances of filing claims increase. Besides, the premium amount raises if you add more drivers to the policy.

  • The location:

If you move to a new locality that is prone to thefts, natural calamities, and humanmade calamities, it increases the risks to your vehicle. This increases insurance premiums. Car insurers usually list the areas that are high-risk zones. If you live in these zones, the chances of filing claims may increase. Your premiums might increase as well, depending on the traffic laws governed by that state or city.

  • Number of cars

The other factor that affects the premiums is the number of vehicles insured under the plan. If you buy or sell a new car that is covered under the policy, the premium amount changes considerably. Most of the insurance companies offer discounts to those who insure multiple four-wheelers under one plan.

Whether you buy car insurance online or offline, there is no escape from the premiums. Some external factors shake up the premium such as inflation, demand and supply of some vehicles and parts of the cars, etc. All you can do is control the personal factors, making sure the premiums remain unaffected.