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Petrol Vs Diesel: How Car Fuel Affects Your Car Insurance Premium?
by Aravind Thakur Finance AnalystWhether you have a diesel car or a petrol car or an electric car, it is mandatory to purchase a third-party car insurance policy in India to avoid legal penalties. There are pros and cons to both diesel and petrol, so it is up to an individual to decide which is best for them. As we discuss the impact of petrol and diesel engines on four-wheeler insurance premiums, we will also explain what you should consider when purchasing a petrol or diesel-powered vehicle.
Earlier diesel was preferred only for commercial vehicles like trucks and buses. Whereas petrol was used for private cars. Due to several technological advancements, today diesel cars are equally manufactured along with petrol cars. A car insurance policy protects an insured vehicle against third-party liabilities, natural and man-made disasters.
Need for Car Insurance Policy
- Third-Party car insurance is compulsory in India as per Section 146 of the Indian Motor Vehicles Act of 1988. Hence, it is an offence to drive a car without car insurance.
- A comprehensive four-wheeler insurance policy safeguards your car against third-party liabilities; own damages such as fire, floods, theft, earthquakes and so on.
- Shriram Car Insurance policy serves as a last resort of financial help in terms of timely claims.
The car insurance premium depends on various factors, including the fuel type, IDV, place of registration of the purchased car. We might feel surprised by seeing the premium while purchasing a car insurance. Do you know that the car’s fuel type is one of the key factors in determining the four-wheeler insurance premium?
How does car’s fuel type impact the car insurance premium?
A car's fuel type or variant is one of many factors affecting its premium. Car insurance premiums differ depending on whether your vehicle is a petrol or diesel model.
Petrol Vs Diesel: Factors Affecting Car Insurance Premium
Cost of Vehicle
A diesel car costs slightly more than a petrol car. Consequently, diesel cars have a higher car insurance premium than petrol cars.
Repair Cost of Vehicle
Due to the higher repair costs of diesel engines, diesel car insurance premiums are also higher. In the same way, expensive cars' spare parts are costlier than budget variants. As a result, car insurance premiums for high-end cars rise.
Other Factors Affecting Shriram Car Insurance Premium
The cost of a vehicle is not the only factor that determines its premiums. There are several factors that determine the insurance premium for a vehicle.
Make, Model and Variant
The car insurance premium calculation also depends on the make, model and variant of the insured car.
Age
The age of the used car is helpful in determining the IDV of the vehicle.
Location
A car's insurance premium is influenced by its location. Insuring a vehicle in a metropolitan area will cost more than insuring a vehicle in a Tier III city.
Type of Policy
A comprehensive plan costs more than a basic third-party plan. In addition to comprehensive plan, add-ons will increase the premium.
IDV
Insured Declared Value (IDV) is the estimated market value of the insured vehicle as determined by the insurance company. It is the amount that must be paid to the insured in case of a total loss.
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About Aravind Thakur 
Finance Analyst
0 connections, 0 recommendations, 6 honor points.Joined APSense since, July 21st, 2022, From Chennai, India.
Created on Jan 16th 2023 06:05. Viewed 150 times.
