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Explaining Car Insurance Policy

A far reaching auto protection strategy is an absolute necessity as driving might be fun however in the meantime it includes high hazard if there should be an occurrence of any projection. Outsider protection is a statutory commitment in our nation yet you can pick your inclinations from impact scope, extensive scope and individual damage assurance However, you should go in for an auto protection strategy that gives add up to security to you, your vehicle, your co-travelers and outsider obligation as while driving you and your partners are additionally at hazard.

How is car insurance premium calculated?

Car insurance premium is calculated on the type of insurance and other factors as explained below:

  • Types of car insurance: Third Party Liability, Own Damage, Personal accidental coverage. Depending upon the insurance type you opt, your premium would be determined.
  • Cubic Capacity of Engine: Engine size is one of the important factors in calculating the premium. The higher the cubic capacity if engine, the higher the premium.
  • Car Model/Type: The new car demands more premium. As the car ages, its value is depreciated and the premium decreases.
  • Registration place: The city in which vehicle is registered is considered while calculating the insurance premium. If your vehicle is registered in Delhi and you use it in Chennai, then also the premium would be calculated on the basis of your registered state. The premium is higher in the metros as they are more prone to vehicle theft and accidents.
  • No claim bonus: If you do not make any claim during one policy year then you can avail discount on your next premium. The discount starts from 20% and can be increased progressively upto 50% on the Own Damage premium and is not extended towards Liability premium.

No Claim Bonus is portable and you can get the benefit if you purchase a new car as it is provided to the insured and not the insured car. It is basically a reward for safe driving habits of the policy holder. It is applicable, even if you want to change your insurance provider. You need to show the NCB proof from your previous vendor and can avail NCB discounts from your new provider.

The factors discussed above are the major factors that determine the insurance premium. However, apart from that there may be several other factors such as age and profession of the policy holder and the safety devices installed in the car that are used in calculating the car premiums.