Today, a car buyer is spoilt for choices. Not only do you have so many car brands to choose from, but you also can opt for a fuel version—petrol, diesel, CNG, electric, or hybrid—that suits your need. With buyers looking beyond petrol-only car models, manufacturers are flooding the market with several varieties of cars. However, irrespective of the car type, it is mandatory to have insurance to drive the car on Indian roads. Does the make of a car have any effect on the car insurance, and if so, then to what extent? Here’s the answer.
- Car engine
A basic third-party liability car policy is a must-have for all types of four-wheelers. However, it does not cover any damage to your car. You have to buy an additional own-damage policy or upgrade your plan to a comprehensive policy to cover any damages to your car. The third-party policy premium is pretty straightforward as it depends only on the engine capacity of your car. Also, it is standardized by IRDAI, the insurance regulatory body, across insurers.
- IDV (Insured Declared Value) of the car
The premium component for own damage (OD) cover takes into account the IDV of the car after deducting depreciation. The IDV determines the sum insured of the motor policy. A diesel car’s engine is more expensive than a petrol car. This leads to a higher price for diesel cars and pushes up the IDV.S o, you will have to pay a higher premium for the OD and comprehensive policy of a diesel car compared to that of a petrol car. The OD and comprehensive policies are not compulsory by law. The insurance companies can fix the premiums independently, taking into account the IDV and depreciation cost. However, you can negotiate with the insurer to keep the IDV close to the car’s current market value.
Certain other factors that affect the car insurance premium are:
- Type of plan
A comprehensive policy would be higher than a liability policy due to greater coverage. Besides third party liabilities, it covers damages to your car. You may get additional discounts if you buy online 4 wheeler insurance.
- Add-on covers
You may buy add-on covers for additional coverage. This would increase the total premium but is beneficial in the long run for covering damages to the car.
- Policyholder’s location
Insurers consider metro cities as more accident-prone due to the huge volume of traffic and rash driving. So, compared to a policyholder in a small town, you have to pay a higher premium if you stay in a metro city.
- Anti-theft protection
If you install anti-theft devices certified by the ARAI (Automotive Research Association of India)in your car, it will serve as added protection. You should mention this during policy purchase to get additional discounts from the insurer.
So, factors such as fuel type and engine capacity of a car affect the total insurance premium. Therefore, the premium of a diesel car would be higher than a petrol car. Apart from these, your location and optional covers will also affect the policy premium to some extent.