You have researched and identified a used vehicle that matches your needs and fits your budget. However, before you conclude the deal, car insurance is one more crucial factor to account for.
Car insurance for older cars is a legal requirement and a savvy way to safeguard yourself and your vehicle from unexpected risks. Yet, how do you select your used car's ideal car insurance policy? And what impact does your used car's valuation have on your car insurance premium and coverage? We will answer these questions in the next section.
How does Used Car Valuation Affect Car Insurance?
Determining your car insurance quotes for older vehicles and coverage relies significantly on how your used car is valued. Various factors come into play when valuing your used vehicle, including its
- Make
- Model, variant
- Registration year
- Mileage
- Condition
- Market demand
This value is called your car's Insured Declared Value (IDV). The IDV represents the maximum amount you can claim from your insurer for a total loss or theft of your four-wheeler. Calculating the IDV involves subtracting the depreciation from your car's current market value.
The higher the IDV of your car, the higher your car insurance premium will be. That is because the insurer will have to pay more in case of a claim. On the other hand, the lower the IDV of your four-wheeler, the lower your vehicle insurance premium will be. But this also means you will get less compensation in case of a claim.
Conclusion
Buying a used car can be a great way to save money and fulfill your dream of owning a car. But you should also be careful about choosing the right car insurance policy for your used car. The valuation of your used car plays a vital role in establishing your car insurance for older vehicles' premium and coverage. Choose an IDV that matches the actual value of your vehicle and does not compromise the quality and scope of your car insurance policy.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the relevant industry. It is advised to verify the relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information