Cars are more than just practical means of mobility for most owners; they also carry emotional and financial attachments to their vehicles. This is why most people have no problem choosing the best coverage for their highly-valued cars and going above and beyond to protect them. However, most people need to know how car insurance premiums are determined. People frequently become puzzled when they notice a yearly increase in their car insurance prices.
5 Factors That Influence Your Car Insurance Premium
Alt: Factors Shaping Your Car Insurance Premium: An Insight into 5 Key Influencers
Several factors are considered while determining the car’s insurance premium cost. The following factors affect the cost of your car insurance premium:
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History of Your Claims
If you filed a claim on your car insurance during the previous policy year, the insurance company will evaluate a higher risk probability. Consequently, your increase in car insurance premiums.
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Location
Where you live has a big impact on how much insurance costs. Your premium will increase if your insurance provider learns that you reside in a home where theft or accidents happen regularly since there is a greater likelihood that your car will be damaged.
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Modifications to Your Vehicle
You’ll undoubtedly want to add extras to your car to improve its looks and functionality as it ages. Therefore, your premium will likely go up if you have made any modifications to your automobile that enhance its functionality or attractiveness.
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Changes in the Workplace
If you drive to work every day, you should know that prolonged driving increases the possibility of collisions for drivers and their cars. If you move to a new job that needs you to travel farther, you should prepare for an increase in your car insurance premium.
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Changing a Driver in the Vehicle’s Insurance
Your premiums could vary due to the expense of adding a new driver to your policy. Some parents may be surprised to learn that adding a new policyholder—especially if they are a teenager—will result in higher monthly premiums.
Conclusion
You should be able to make wiser choices from now on if you know the factors contributing to a higher car insurance premium. Getting auto insurance is a smart move because, even with rising premiums, it shields you from unforeseen, high expenses. A minimum amount of third-party car insurance is also sufficient if your vehicle is old or you only drive it sometimes.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and 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.