Vehicle insurance cost depends on multiple factors. You need to know about all the factors to control the cost and weed out unwanted features.
Car is not a luxury anymore. Owning has car has now become a necessity in the post COIVD-19 world. Fear of getting infecting and social distancing norms have compelled more people to commute in private cars. And to keep a car, you need to keep it adequately insured as per the RTO act.
Car insurance costs are significant in India. In some case, you end paying as much as you pay for the annual maintenance of your car. However, there are a few ways through which you can check the cost of your motor vehicle insurance.
Your car insurance is divided into main parts. The first one is the compulsory third-party cover that protect the vehicle owner from any legal liability caused by an accident. It could be death or injury of the third party or damage of third-party property.
The second component is the own damage cover. It is optional for car owners. You can leverage this insurance to cover the costs of accidental repairs. It also pays up full insured declared value (IDV) in the even of theft or total loss of vehicle in an accident. IDV is pre-defined by the insurance regulator in the basis of yearly depreciation.
The premium amount of your car insurance depends on multiple factors.
Major chunk of the insurance premium is decided on the basis of the market value of a car. Newer cars tend to command a higher insurance premium that reduces gradually on the year-on-year basis as its value depreciates in the market. Your premium can also become expensive if your car is a luxury car.
Engine size and purpose of the vehicle also increases the premium of the vehicle. Add-ons like engine cover, zero depreciation cover, key and lock replacement among others also impact the premium of your vehicle insurance.
Geographical location of the vehicle can also impact the insurance premium. In India, motor vehicle is calculated on the basis of two zones i.e. A and B. Zone A includes Tier-1 cities including Kolkata, Mumbai, Chennai, New Delhi, Bengaluru, Hyderabad, Pune, and more. Zone B covers the rest of the Indian cities.
So, if your residential area lies in Zone A then you will have to shell out more premium for the same car insurance benefits. It is because when you drive in a big city, the traffic is denser and there are greater chances of an accident.
Apart from the above mentioned information, you also need to know the things that are not included in your motor insurance policy. It includes depreciation on replaced parts, damage to the engine, transmission, tyres, and other wear and tear parts. Also, damages not caused due to a road accident are not covered under your car insurance.
An insurer can also deny your insurance claim if you were driving your vehicle under the influence of alcohol or if the driver was minor.