Factors governing car insurance premium

Car insurance is a mandatory stage in the registration process and taking the vehicle to the road. The rates of insurance depend on the types of cars. Besides, mixed criteria for calculations of premiums are offered by various insurance companies. It is advised to be exceedingly careful while selecting the insurance to avoid getting trapped into paying twice or even more. There are different factors governing the car insurance cost say; driving history, the car's condition, coverage, and the age of the driver.

Let’s first discuss on what is the premium for car insurance

The amount of money you pay to an insurance company for active coverage is your car insurance premium. This sum may differ widely based on several factors. It is always recommended to confirm with your local Agent first. He can guide you compare car insurance premiums. You can subsequently choose the best policy for you.

Wondering how to calculate insurance premium?

The amount the insurance companies charge as the insurance premium is determined by statistics and mathematical calculations done by the underwriters of the insurance company. The insurance premium to be charged to a customer depends on life history, age and health of the applicant.

Factors That Impact Car Insurance Premiums: Each factor is weighed differently

• Insurance Location Geography
  It is one of the notable factors that decide the insurance premium of your car. The geographical location where you reside and purchase an insurance policy has a greater impact on the premium rates. If you inhabit in an area where there is less traffic you will find lower premium rates. Premiums are much higher in metros and big cities, where there are busy roads throughout the day and night.
• Personal Factors
  Personal factors play a significant role in deciding the premium rate. Women pay less premium amount as compared to men because they are considered safer drivers as compared to men. Customers’ age is undeniably an essential factor that can push costs either up or down. People below 25 years pay highest premium and person between the f 50 years to 65 years pay the smallest amount.
• Types of Engine
  If your car runs on diesel you have to pay higher car insurance premium for your car. The vehicles that run on diesel are costly, so is their IDV. Hence, the car insurance policy for a diesel engine is costlier as compared to a car that runs on CNG or petrol.
• Types of coverage
  The premium changes based on the coverage and advantages offered by the policy. There are all-inclusive car insurance plans that offer an array of benefits to the owner (driver). These are however, little pricey. Comprehensive coverage under a single car insurance plan is generally costly.
• Security System installed
  Car insurance premiums depend on the security system installed in the car. If you have a security system, installed in the car with the premium amount will automatically rise.
• Customized Car Insurance Plan
  This is an additional vital reason why car insurance premiums frequently increase or decrease. A customized car insurance plan that meets all your essential needs might cost you higher premiums. There are many insurance companies offering customized car insurance plans that give benefits that are important for individual, say personal accident coverage.
• How much you use your car:
  For those who have a long travel to work often need to pay more for insurance than someone who only uses their vehicle only for weekends. This is because of more miles behind the wheel mean more exposure to threat.
• Prior insurance history
  All claims can have an outcome on your rates. As at-fault claims will result in an add-on charge and comprehensive claims usually will not. Yes, the number of claims you make does matter.

If you have already made a number of claims, on your policy in a short period of time, your car insurance rate quotes should be higher. Car insurance premiums may change depending upon the reasons mentioned above. You can compare the premium amount of different car insurance policies online from the comfort of your home before finalizing one. There are online car insurance premium calculators available as well. This will help you out to buy the most affordable car insurance plan available in the market.

Try maintaining a clean driving record, having a good credit score, purchase a vehicle whose insurance won't break the bank, and choose the right coverage for your requirements. Understand the factors properly, grab the best deal and keep your wallet happy.