Know why your car insurance premium increases every yearby Kotak General Insurance Insurance Consultant
Your car insurance premium is determined by an array of factors. You should continue working on those factors and keep them in check because the same or new additional factors might be taken into consideration while deciding your premium at the time of renewal. There are chances that your car insurance premium may change each year. This depends on you as well as your car insurance company. Regardless of the fact, if you own a third-party liability, own-damage, or comprehensive car insurance policy, your car insurance premium may increase every year. However, it is not so common in the car having third-party car insurance policy.
If you own a third-party liability cover, then your premium for each year may be fixed because it is decided by the Indian Regulatory and Development Authority of India. Third-party car insurance premiums according to the engine capacity of the vehicle.
If you only own a third-party car insurance policy, then there are no factors under your control that can influence the premium price. The government determines these prices. Hence, unless any modifications are made by them, there will be no changes in your car insurance premium at the time of renewal.
But, if you own a comprehensive car insurance policy, there are multiple factors that may add to your car insurance premium each year.
1. Driving Record
Your driving record throughout the annual course of your car insurance policy determines how careful you are on the road. A reckless driving record, consisting of breaking traffic rules, drinking and driving, not paying your fines, etc., can set a bad record. When you renew your car insurance policy, driving record will be considered to decide your car insurance premium. A bad driving record may portray you as a liability to the car insurance company. Hence, there are chances that your car insurance premiums will increase next year.
2. Number of claims
There are typically no restrictions in terms of the number of claims that you can file. However, if you file too many claims in one year, not only will you lose your No Claim Bonus, but you will also have to pay higher premiums the next year. Too many claims mean that either you are an irresponsible driver or car owner, or you are attempting to exploit your privilege of filing claims. As a result, your car insurance premium may increase.
If you have made any modifications to your car, you will have to get it insured under your car insurance policy. Before you even make any modifications, it’s best to run it by your car insurance company to understand the scope of the increase in your premium. This way, you are prepared to bear the added premium amount.
4. Add-on coverage
Add-on coverages make your car insurance policy more well-rounded. At the time of the renewal of your motor insurance policy, if you buy additional riders, it is bound to increase your car insurance premiums.
5. Voluntary Deductibles
Voluntary deductibles can increase or decrease your car insurance premiums. If you choose to increase your voluntary deductibles, your car insurance premium will increase. However, during the first year of your car insurance policy, if you feel that there is not much need for voluntary deductibles for you, you can choose to decrease the amount, but you will end up paying higher premiums than before.
6. Age of the car
The age of your car and your insurance premiums go hand in hand. As the age of your car increases, it becomes more vulnerable to damage. Hence, you are more likely to file multiple claims to get them fixed.
As you can see, there are many factors that can increase your car insurance premium each year. Some of these are under your control, while others are not. With time, you will understand your needs better and customise your car insurance policy each year to better serve them. Sometimes, this may result in paying higher premiums. To ensure that you always get the best premium rates, you should try to make the best of situations that are under your control.
For more information, visit the Kotak General Insurance website.
Created on Mar 3rd 2022 05:02. Viewed 69 times.