What are the factors that will determine your car insurance premium?

Car insurance is the utmost important thing for every car owners. Not only for the accidents or damage but car insurance is a way to protect you too. But the premium you need to pay for the car insurance may differ as per the car, owner and the insurance company. To have an affordable policy with adequate coverage, you need to be aware of some essential factors that may determine your premium for car insurance. If you know the key factors, you can make the right call for your car insurance.

A variant, make, model

Your car model or variant will determine the premium for sure. For a luxurious sedan, you need to pay more premium than a hatchback. The reason is the basic composition of the car. This is the key reason that the car type, manufacturer, engine capacity etc can determine the premium of the insurance.


The age of the car can take two major concepts of the car insurance IDV or the Insured Declared Value or the depreciation. They are interrelated. IDV is the current value of the car or the second one is the reduction in the value of car due to regular wear and tear. As old cars have less IDV and more depreciation, you need to pay lower premiums for old car.


How you are using the car? This is another point that determines the premium. If you drive your car to work and travelling to different venue to meet customers, the premium will be much higher compare to you driving the car back and forth to work only.


You can go for the basic coverage only if you want to pay less premium amount but if you look for more add-ons or the third party liabilities, you need to pay more premiums. Premiums increases usually with the types of coverage.

With new add-ons

Add-on with the basic insurance may offer you more security but it comes with more prices also. If you go for the add-ons like passenger cover, zero depreciation etc, your premium amount will hike too.

Anti-theft device

You can protect your car by using an anti-theft device and can get a discount on your insurance premium. You can use other safety devices too for the same reason.

Purpose of the car

You can buy a car for personal or commercial use. For commercial cars, the premium amount should be higher.

These are the most important things that you need to keep in mind when determining the insurance premiums.

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