How Does the Make and Model of Your Car Influence Your Insurance Premium?

What factors do you consider when you are choosing your dream car to buy? Is it the mileage? The cost? Or the fuel type? There must be many factors that go behind choosing your car. You want your car to stand out and look the best among the rest of the cars parked in the lot. Or you might want to have the best features in order to have a fantastic driving experience. In order to ensure your driving experience, you might choose to add a few features here and there. What you might not have realized is that while aspects like the type of insurance, whether it is third-party car insurance or comprehensive affect the premium amount, factors like the make and model of the car might also influence your insurance premium.

What is the Make and Model of a Car?

When we talk about the “make” of an automobile”, we are talking about the brand or the manufacture of the car. These could be Honda, Chevrolet, Maruti Suzuki, or any other brand available in the market.

The term “model” refers to specific products manufactured by the same manufacturer. The manufacturer is the same, but the prices and the features might all be different. You can identify models by their name or initials, Alto, Alto K 10, and Baleno are all manufactured by the same brand, Maruti Suzuki. By adding the model year to the make and the model, you will get the complete name of the automobile, such as 2021 (model year), Toyota (make) Prius (model).

How do the Make and Model of the Vehicle Affect the Premium of Your Car Insurance Policy?

A car’s make and model significantly influences the premium of your car insurance policy. Here are the factors of the make and model of your car that may affect your car insurance premium:

  • Vehicle’s age: A new vehicle is more likely to get you better coverage than an old and used vehicle. This is because an old and used car may require more repairs than a new car. An old car may also be damaged, and the prices of repairs are more expensive. The insurance premium increases with the increase in the age of the car and vice-versa.
  • Engine capacity: The capacity of the engine plays a very crucial role in deciding the premium for your car insurance. If the cubic capacity of the engine is high, the premium is bound to increase while if it is low, then the premium amount also goes down.
  • Vehicle cost: The value of your vehicle affects the premium of your car insurance policy. This is because expensive cars come with expensive car parts. In case of damage to certain parts, the replacement costs of these parts will be higher. Hence, insurance agencies will charge a higher premium. Another reason is that expensive cars are more likely to become victims of theft, and the insurance agency will have to shell out more money to replace the vehicle.
  • Type of fuel: Nowadays, there are a lot of options for fuel. You don’t only have petrol and diesel but also CNG and LPG, and some even run-on electricity. Your insurance premium amount could change based on the type of fuel your vehicle uses.

Other Factors that Impact the Premium of Your Car Insurance

Now that we have covered factors of make and model of your cover let’s discuss other factors that have an influence on the premium of your car insurance policy.

  • Driving history of the owner: When you apply for a car insurance policy, the insurer will ask about your driving history. This is to ensure that you haven’t been involved in accidents where the mistake was on your part. If that’s the case, then you could be charged a higher premium. This shall only be the case if you were at fault for any of the accidents. Although, if the accident didn’t involve anything that could have been avoided on your part, then your insurance premium stays unaffected.
  •  Age of the policy taker: If your age falls within 18-25, then it is lost like that that you will be charged a higher insurance premium. According to records, it is noted that people within this age group are more likely to cause accidents.
  • Type of cover selected: There are two types of car insurance policy plans available in the market. These are third-party car insurance covers (made obligatory by the Government of India) and Comprehensive covers. Third-party car insurance covers are usually available at much more reasonable rates. This is because third-party insurance covers expenses for the damage endured by the third party’s vehicle or the third-party person. The premium cost of comprehensive car insurance covers varies with the insurance agency and the add-one that you choose.
  •  Location of car registration: The car registration location is usually divided into two categories – metropolitan cities and non-metropolitan cities. Since metropolitan cities are crowded with frequent traffic, accident cases are also on the higher side. This, cars having registration in metro cities will have to pay a higher premium while cars that have been registered in non-metro cities pay a lower premium.
  • Owner’s profession: The insurance premium also depends on the driver’s profession. If he is involved in a profession that increases the risk of being involved in accidents, then the driver might have to pay a higher premium.
  •  No claim bonus: If you haven’t claimed anything in the preceding years, then you will get a discount on your insurance premium. Although, once you register a claim, your no-claim bonus is no longer available, and you will be left vulnerable to paying a higher premium.

The bottom line is the make and model of your car have a big influence in deciding the premium charges of your car insurance policy. If you are planning to buy a brand-new car, and don’t want to pay a higher premium rate, then you should do your research. Look for models and types of cars that have a lower premium rate.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.