Branded content: the impact of car classification on your insurance policy

Published Aug 31, 2021 4:00:00 PM

We take a look at the factors that affect the premiums you pay on your auto insurance based on the type of car you own.

Buying and maintaining a car is expensive. You cannot risk an accident or damage and pay out of pocket every time. If this happens, a car will become an unaffordable liability that is best left to the rich. There are several considerations in purchasing an insurance policy, and the premium on the policy also varies depending on the type of car you own.

Impact of the type of car on the cost of the third party premium

The third party auto insurance is the legally required part of auto insurance. If you have an accident and need to compensate the victim (either a third party or yourself in need of treatment), the insurance company, rather than the owner (i.e. you), will pay the cost. amount. The Motor Accident Claims Tribunal awards heavy compensation and therefore third party insurance ensures that the victim receives this money without overburdening the vehicle owner. The Insurance Regulatory and Development Authority of India (IRDAI) regulates this process. The regulator also declares the price of third-party coverage for the vehicle. Likewise, IRDAI determines the premium for a civil liability insurance contract in three price brackets, depending on the engine capacity.

  • Cars with engines less than 1000 cc have the lowest premium cost for liability insurance.
  • Cars with engines with a displacement greater than 1500 cc have the highest premium cost for liability insurance.
  • Cars, which have engines with a displacement greater than 1,000 cc but less than 1,500 cc, will see their third-party premiums range between the premium price for the above policies

Impact of the type of car on the cost of the damages premium

Your policy’s damage coverage protects your car and compensates you in the event of an accident, theft or damage caused by any natural disaster. In this regard, there are many aspects that determine the price of an auto insurance policy.

  • Typically, the segment type of your car becomes the primary factor in determining the VID, which then has a direct impact on the amount of the premium. So, it will naturally be cheaper to buy auto insurance for small cars with a lower purchase price. Let’s say one person buys a segment A car, which costs less than Rs. 5 lakhs, and another person buys a segment C car, which costs Rs. 10 lakhs; the premium will certainly be less for the cheapest car.
  • Many companies decide on the premium based on the carType of body. Although this varies from company to company, an estimated order of the cost of a policy increases, when you buy auto insurance, can be as follows:
  • Hatchbacks will always be the cheapest to insure due to their size and large sales volume.
  • Insurance for sedans tends to cost a bit more than hatchbacks depending on their actual price range.
  • SUV and minivans / CUV are among the most expensive cars to insure among mainstream cars.
  • High-end sedans and sedans will have even higher police costs due to their higher price tag even though their body type is small.
  • Sports SUVs, luxury SUVs, sports sedans, supercars and hypercars are the most expensive to insure due to their high costs as well as the expensive engineering involved, which can lead to expensive repairs.

Insuring your car may seem like a chore, but trust us, it’s more than a necessary expense. You won’t realize the benefit of having an adequate policy unless you need it.

Every paisa invested in to buyCar Insurance worth it when you can’t bear all repair and compensation costs out of pocket. A beloved car deserves auto insurance of equal value. So make sure you get the best insurance policy from the best insurance company.

Also see:

Branded content: factors that impact your bike insurance premium

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Justin D. O'Neill

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