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Can Your Vehicle Insurance Premium Change Over Time?

Can Your Vehicle Insurance Premium Change Over Time?

Can Your Vehicle Insurance Premium Change Over Time?

Can Your Vehicle Insurance Premium Change Over Time?

Owning a car is not easy. The expenses related to maintenance and fuel are high, especially after the war. And on top of that, there is the monthly motor insurance premium to care about. While it is required by law in India, it is also wise to get your car insured before it expires. And at the time of renewal, the premium amount may differ from what you paid the previous year, depending on various factors.

The concept of insurance premiums can be confusing because it is commonly stated that if you have yet to make any claims or your car is old, your insurance premium should decrease. Even those who have yet to file a claim face higher premiums. Why? What is causing the premium to rise with each passing year? So, let us understand the factors.

Why Do Premiums Increase?

Our country’s insurance policies are regulated by the Insurance Regulatory and Development Authority of India (IRDAI).

IRDAI regulates third-party auto insurance policies in particular. The Motor Vehicles Act of 1988 requires this insurance plan. It covers third-party losses and damages resulting from an accident. IRDAI dictates the changes in premiums on various factors such as wear and tear, vehicle age, etc.

How to Reduce Your Car Insurance Premium

Motor insurance is a necessity and to ensure that you get the best premium, there are certain factors that you can consider. Here are a few:

  • No-Claim Bonus: You can receive the No Claim Bonus (NCB) in the cost of your car insurance for the following year if you don’t file a claim in the current year. If you don’t file a claim for three to five years, the discount could increase from 30% to 50%.
  • Compare Car Insurance Online: mainly car insurance companies offer online insurance services. You can buy car insurance online by comparing various policies from different insurers.
  • Vehicle: which car you are driving also matters a lot. If you have a high-end luxury vehicle, the premium will be more. It is because the price of the car is high and thus, the services related to it, in case the insurance company has to pay for the repairs.

Reasons Why Car Insurance Premiums Rise

Have you ever wondered why auto insurance costs increase each year? In this section, let’s examine a few prevalent explanations:

  • Inspection of Car: If a significant amount of time passes between the date your policy expires and the date you apply for a renewal, your insurer might inspect the four-wheeler before renewing the coverage.
  • Risk Profile: Anyone with a high-risk profile makes untrue claims or has engaged in the illegal use of a vehicle. Furthermore, anyone who has a history of filing claims related to accidents can expect their insurance costs to skyrocket.
  • Switching the Insurer: Although you can change insurers, doing so might result in higher premiums. However, the costs can also decrease if you do extensive research before purchasing a plan.

Bottom Line

Now that you know what causes the rise in car insurance premiums, you can use the information to work on the factors that are in your hand and save a good amount of money. You can always decide to abide by the advice that will lower your car insurance costs.

 

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