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Does Car Insurance Decrease Every Year?

Car insurance premiums in India may not decrease annually due to factors like vehicle age, claim history, and add-on features. Understanding these influences is crucial for policyholders seeking to buy or renew their insurance.

  • 21 Feb 2024
  • 2 min read

Many car owners often wonder if a car insurance premium decreases each year. And the answer is: it may be possible, but decrease in car insurance premium may be dependent on multiple factors. The case differs from car to car. Understanding how these premiums work is crucial when you need to buy or renew your car insurance. This article will take you through key factors that may impact your insurance premium.

Does Car Insurance Decrease Annually?

In India, car insurance premiums don't automatically decrease on a yearly basis. Several factors come into play when determining the cost of car insurance, including: 

  • Age of the vehicle 
  • Make of the vehicle
  • Model of the vehicle
  • Policyholder’s driving history
  • Geographical

Apart from these, there are other factors that can affect premium rates. Scroll down to understand these factors in detail:

  1. Depreciation and Premiums: As a car gets older, its value depreciates over time. This depreciation may potentially lead to a reduction in the insurance premium. However, it's important to note that other aspects, such as repair costs and replacement part prices, can counterbalance this decrease.
  1. Claim History: A history of filing claims may impact premium rates. On the other hand, not having any claims can result in premium discounts through a no-claims bonus (NCB) system.
  1. Zero Depreciation Add-On; By opting for this add-on feature, policyholders ensure that their insurance provider compensates for any depreciation in car parts value during repairs or replacements. This includes covering expenses like airbag replacement costs.

Also read:


If this question ever crossed your mind:“Does car insurance premiums decrease every year?” then we hope this article has helped. It's important to review and make adjustments to your car insurance coverage as circumstances change. This helps you optimise your insurance policy and ensure it meets your needs.

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