Categorized | Car Insurance

what affects car insurance premium?

Car insurance is a necessity whether you are driving a used car or a new one and has several associated benefits with it. But along with all the advantages, also comes the low-down that you have to keep apart a certain sum of money from your income every year to pay the premiums.

The Premium that you pay for your car every month is an amount that vastly varies based on several factors. You can make it significantly lower if you try to and of course only if you are aware of the several ways through which you can reduce your insurance premium for almost the same kind of services and sum assured.

Mentioned below are some factors that affect the premium for your car insurance policy:

1)Your Age and Gender
Based on the statistical information, it has been revealed that teenagers and relatively younger drivers are more likely to have a car accident. May be, due to the fact that they tend to drive faster and have lesser experience. As for gender, women are said to be smooth drivers and show fewer instances of car accidents. Therefore, women are likely to pay a somewhat lower car insurance premium than their male counterparts in many cases. So, if you are a male driver in your teenage or early twenties, be prepared to pay higher premiums for the same car insurance policy.

2)Previous Driving Records
While taking an insurance cover, you will be asked for previous driving records. A record of defaults or having caused accidents in the past can affect you adversely when buying car insurance. Most companies would consider you more vulnerable to rash driving or accidents if your previous records talk about the same. A clean record, therefore, will be a sure shot remedy for lowering the car insurance premium in the future.

3)Make of the Car That You Drive
The make of your car determines how much you will be paying for its protection cover in the future. Older cars, cars with lesser security features, or cars that are more popular with thieves are the ones that make you pay the highest for them. On the other hand, vehicles those have hi-tech security and locking mechanisms, are known to last long and are perceptibly less accident-prone are more comfortable on your pocket when the question of paying premiums arises.

4)The Purpose for Which You are Using Your Car
Whether you are using your car for driving to work, to the villages, or for pleasure determine the premium you would need to pay. What companies see while deciding on a quote for a suitable insurance cover for you is how much you would be actually driving the car. More the miles per year you drive, more would be the premium you pay for a car insurance policy.

5)How much Cover you Desire
While third party insurance cover is mandatory as per the Indian law, you can opt for a more Comprehensive insurance Policy that cover you in case of accidents and your vehicle in case of theft, damage etc. Naturally, the cost of premium goes up with the extension of coverage.

Many of the above mentioned things affecting insurance premium are beyond your control. But some factors like maintaining a clean driving record and buying vehicles that are higher on security features can help you lower your premiums. It is also advisable to compare insurance plans offered by different companies through insurance comparison websites like and choose a policy that offers lower premiums and Coverage as per your needs.