Factors Affecting Your Car Insurance Rates

June 25, 2015 18:30 IST by in Car-Finance.

While going for car insurance it might be tempting to lower the rates either by raising deductibles or lowering coverage amount. These two are considered as the most important factors affecting your car insurance rates. It is not easy to realize but your overall vehicle insurance rate is affected by a lot of factors, some of these can be brought under control and rest just remain out of reach.  However, having an understanding of prime factors that might affect your car insurance rate in India may help in taming unwanted expenses.

Factors affecting your car insurance rates
Factors affecting your car insurance rates
  • Demographic Factors: Gender, marital status, age, geographical location, credit history are some of the major demographic factors that directly affect your car insurance rates. Young males especially teenagers have a higher tendency for accidents as compared to females. Similarly, married people are less prone to accidents as compared to singles.  The same rule applies to geographical locations, the closer you are to heavy traffic areas higher are your chances of getting caught in accidents.

  • Profession: A few car insurance companies in India like to correlate risk of accidents with subject’s profession. The premium is then adjusted accordingly. For e.g. delivery drivers and journalists are more prone to accidents as compared to other people. Airline pilots, corporate, and government servants, on the contrary, only drive from home to office and spend very less time over roads, these people are less prone to get into accidents. The premium amount for the former is thus higher and average for the later.

  • Safety Rating: Owning a car with higher safety ratings means lesser probability of accidents and vice versa. The safety rating of your vehicle can thus be counted among the major factor that directly affects your car insurance.

  • Size Of The Vehicle: Larger vehicles such as loading trucks, SUVs, MUVs, etc have less chances of getting into trouble as compared to smaller ones. The insurance rates of vehicles can be thus understood indirectly proportional with their sizes.

  • Car’s Age: It is true that repair costs of new and old vehicle is almost same, however, the older cars will be damaged more badly as compared to new cars. The age of your car thus affects your insurance premium amount directly. Older the car higher will be its insurance premium.

  • Driving History: In case you have any history of accidents or you have made any insurance claims in past, the insurance company will expect a claim from you in near future for somewhat similar reason, the premium amount is bound to go higher.

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