Factors Affecting Car Insurance Quotes

Having a car insurance policy will help you overcome most of the financial liabilities incurred due to damage to your car. While selecting your car insurance, it is very important to make sure that the policy you pick offers you maximum coverage at an affordable premium. Read this article to find out what factors affect your car insurance quotes. 

Top 5 Factors Affecting Car Insurance Quotes 

Your car insurance premium is affected by various determinants. The car insurance companies majorly consider the risk factor and the car's market value to determine your car insurance quote. These factors mainly indicate the market value of your car and the risk that the company has to take to insure your car. The following are the points that come into consideration while estimating your car insurance quote- 

• Age of The Car

The age of the car plays a major role in determining the cost of your car insurance quote. This is mainly because of the wear and tear that your car undergoes over the period of time. As you use your car, its parts eventually lose their efficiency. This regular wear and tear is termed depreciation. This decreases the overall value that your car holds. If your car is old, you will pay a lesser premium as it has a lower value. Similarly, you will be paying a relatively higher premium if your car is new. As your car grows old, the cost of your car insurance premium reduces. 

• Insured Declared Value 

The IDV (Insured Declared Value) of your car is nothing but the current value that your car holds in the market. This value is calculated by subtracting the value of depreciation from the selling price of your car. This is the value that the insurance company considers to set the cost of your car insurance premium. Having a low IDV will mean that the car has high depreciation thus, you will have to pay a low premium amount. On the other hand, if your car has a high IDV, the cost of your insurance premium may be relatively higher. 

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• Model of The Car

The model of your car has a major impact on its market value as well as its efficiency. Some car models are designed for providing mind-blowing performance. On the contrary, some are made for economic purposes. If your car is performance-based, it will indicate that there is more risk involved. Thus, such cars will be marked on a higher cost of the premium. On the other hand, economic cars will have a lower premium cost. It also comes down to the market value of your car’s model. 

• Additional Covers

Insurance companies provide additional facilities in the form of add-on covers. These add-ons will avail benefits that cover situations other than what the policy covers. However, adding these covers will increase the overall cost of your car insurance premium. Therefore, select the covers which are only completely necessary. But, don’t leave your car underinsured. 

• Geographical Location

Insurance companies look at the risk factor to determine the cost of your car insurance quote. The company gazes through location-based records like the safety of your area, or if you have to drive a long way to work, your history with accidents, etc. Your car insurance premium depends on these factors too.

Also read 

Car Insurance Premium For Comprehensive Car Insurance 

Take Away

Purchasing a car costs a lot. Maintaining it is equally expensive. In case of any accidents or damage to the car, repairing it becomes a huge financial burden. Therefore, it is vital to invest in car insurance. Make sure you have an insurance policy that suits your requirement at an affordable premium and drive safely.  

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.