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Petrol vs Diesel: Impact of Fuel Type on Car Insurance

Written by Udit Varshney
Updated On Oct 15, 20232 min read
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Gone are the days when diesel was not synonymous with regularly powered passenger cars and the top spot was for petrol. Diesel was used specifically in those days to serve trucks or other heavy vehicles, such as vehicles engaged in industrial operations.

There is often a debate on which fuel is ideal for a car in the long run as per individual needs and driving necessities. But what you might not be aware of is that there is an impact on the cost of your car insurance on the type of fuel used in a vehicle. In reality, the insurance cost for a diesel car is more than that for a petrol car. The reasoning is that diesel cars are expensive and are operated for longer distances and need careful maintenance. However, if you have a diesel, gas, or electric vehicle, buying a car insurance policy is mandatory. In the event of unfortunate car-related accidents, the scheme provides financial cushioning.

Petrol vs Diesel: Impact of Fuel Type on Car Insurance

Petrol vs Diesel: Impact on Car Insurance and Other Crucial Factors

Here are several points which elucidate the relationship between car insurance and a petrol-driven car/diesel-driven car. Notice that these are generic points, and with some car types, they can differ. Given below are some of the key differences

  1. Vehicle Cost: The cost of a diesel-powered car is usually higher than a petrol-powered vehicle. The cost of the vehicle explicitly affects the premium of the car insurance policy. “The higher the cost, the higher the premium”.
  2. Cost of Repair: The cost of repairing a diesel-powered vehicle is greater. Thus, on such a car insurance providers charge a higher car insurance premium. It also refers to high-end vehicles and other cars that have costly replacement parts.
  3. Other Factors Affecting Car Insurance Premium: The cost of the car is not the only factor determining its premium. There is a mix of factors that dictate how much the insurance provider can charge to insure a car. Here are some top considerations that are taken into account when determining the car insurance premium, aside from the expense of the diesel/petrol car:
  • Location Geography: The geographical location has a stronger impact on the premium. Premium rates are lower in places where the traffic is lower. In cities, where you find crowded roads during the day and night, premiums are much larger.
  • Type of Coverage: Depending on the coverage provided by the insurance policy, the premium is subject to change. Comprehensive car insurance policies that offer the owner/driver several benefits are typically expensive.
  • Automated Car Safety Devices: You will be eligible for a premium discount if your car is fitted with an anti-theft system. Sophisticated devices such as GPS is installed to help locate a stolen vehicle. Though costly, anti-theft devices must be installed since they are not only useful but also you can get a premium discount.
  • Insured Declared Value: In the unlikely case of their car being stolen or deemed a complete loss, IDV is the cumulative value that the insured may demand from the car insurance provider. The value is based on the sale price of the manufacturer which is calculated by deducting the vehicle's depreciation (based on the ex-showroom amount). Besides, the IDV is the value of the vehicle and the fitted accessories and does not cover registration or insurance expenses. This price has a significant impact on the premium for car insurance.

Also Read

Why Holding Car Pollution Under Control Certificate (PUC) is Important?

Simple Steps to Renew Your Car Insurance Policy Online

Take Away

Hence, it is ultimately your decision if to buy a petrol car or a diesel car; however, it will help you to make a better decision by keeping the above points in mind. On the one hand, if diesel vehicles have a higher car insurance premium than petrol cars, on the other hand, because you have to drive long distances each day, they are more economical as diesel cars provide more mileage.

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.

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.
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Written by Udit Varshney
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 Udit has built B2C segments across various industries and has had significant contributions to the insurance sector. Udit in his last stint helped set out the last mile vertical, which soon became the go-to logistics name for daily needs, In his free time, Udit likes to write and listen to poetry.

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