Factors That Affect Your Motor Insurance Premium Having a vehicle is a matter of great convenience, but it also comes with a fair share of responsibilities. You cannot take your four or two-wheeler vehicle on roads without securing them under appropriate motor insurance. It is mandated by law to protect third-party individuals and properties from financial strain arising from accidents caused by the vehicle driver. Some policies cover both third-party and own damages caused by road mishaps. Since motor insurance varies in nature and coverage, so does the premium. If you’re wondering which factors influence a policy premium, let’s explore the top five. ● Vehicle Type and Age Your vehicle type and age significantly influence policy premiums. For example, luxury and brand-new cars generally attract higher insurance premiums than basic vehicle models that are slightly old. Since newer and advanced vehicle models involve higher repair and part replacement costs, insurers always levy high premiums on such vehicles. Older and basic model vehicles have low market value and comparatively lower repair and replacement costs, attracting lower premiums. So whenever you evaluate any motor policy online, always consider your vehicle type and age. It will help you project near-accurate premiums for shortlisted policies, empowering you to pick the best option. ● Geographic Location Whenever you buy policy online or offline, your geographical location will have a massive influence on the policy premium. Insurers will charge a higher premium for securing vehicles in areas prone to accidents, vandalism, etc. They view these areas as high-risk zones, resulting in higher premiums for vehicles operating there. On the other hand, vehicles in safer zones, i.e., areas with the least percentage of accidents, vandalism, etc., will attract lower premiums. Additionally, insurers will also factor in your region’s road conditions and traffic density to arrive at optimal premiums. ● Policy Coverage The policy’s coverage is one of the biggest factors directly influencing motor insurance. In India, two types of motor insurance are the most popular – third-party and comprehensive insurance. They differ in terms of coverage. As the name suggests, third-party insurance only covers financial liabilities toward third-party individuals and property(s). On the other hand, comprehensive policy covers both third-party and own damages. Since third-party policy only covers third parties, it has a lower premium than comprehensive policies. The premium will eventually be higher if you want extensive coverage for yourself (driver), the vehicle, and third-party individuals and property(s). You can say that motor insurance policy premiums and coverage are directly proportional to one another. ● Personal Driving History When you apply for any motor insurance, the insurer will assess and evaluate your driving history. This includes a track record of your past vehicle accidents, traffic violations, claim history from previous insurers, etc. People with a clean driving history and record often attract lower premiums on their motor insurance policy and vice-versa. So, when you compare policies online before buying one, always view the estimated premiums regarding your driving history. It will make it easier to buy insurance offering maximum value. Secure Your Drive, Secure Your Finances Understanding what influences policy premiums can help vehicle owners choose the best policy for their two and four-wheelers. While the premium calculation process is complex, it is significantly influenced by the factors discussed above. Insurers can use additional factors, like no claim bonus, deductible, etc., to balance policy cost and protection, so you can go through individual insurer websites to learn more. A well-informed decision will give you immense peace of mind and financial backing for medical emergencies, so ensure you keep the above-discussed factors in mind while finalizing a motor insurance policy.