Know How Claims Affect Your Car Insurance Prices

Know How Claims Affect Your Car Insurance Prices

Having an appropriate car insurance is both prudent as well as beneficial. A policyholder must pay premium annually to continue the policy in the long run. However, premiums can vary depending upon the type of policy and the add-ons you have selected in the policy. Besides, claims also have an impact on the premiums. Different types of claim or no claim make changes in the profits of insurance companies. Thus, insurance companies decide the prices of policies based on claims and various other factors such as the IDV of the vehicle, city in which you reside, etc. related to car insurance. 

While a majority of people tend to ignore the purchase of car insurance due to the lengthy process, the rest of them are unaware about the same. Given below are a few points, which will give you a deeper understanding of ‘How claims affect your car insurance prices’:

Car insurance price

Car insurance premium can be calculated with the help of car insurance calculator. It helps you to compare and calculate the prices of various policies. Factors that affect your car insurance price are:

  • Car model and variant
  • City of residence
  • Manufacturing year
  • NCB

Usually, car owners assume that if the car functions smoothly, they can continue to pay the same amount of premium upon renewal of the policy. However this is not the case, external factors such as age of the car, IDV etc. also impact the premium calculations. The premium increases if move to a metropolitan city, which falls under Zone A and results in high premium rates.

Liability claim

Liability claim refers to the insurance claim filed during any incident that involves damages to a third party person or their vehicle. If an accident with another vehicle has resulted in injury or death to a third party, then your insurance provider compensates for these. Also, damage to external property is covered under the third party car insurance. The company representative provides assistance in case any legal proceeding arise.

No claim bonus

No claim bonus is offered to you on your two-wheeler insurance for making no claims in a year. No claim bonus is included in the own-damage policy. The no-claim bonus can be accumulated up to a maximum of 50% in six consecutive years of car insurance renewal. However, a tiny claim in a year can make your bonus zero. Hence, shell out from your pocket for small claims to save on your premium during car insurance renewal.

Conclusion

If the insurance company did not check their previous year’s rates and assessed them with the current risk, the rates would be increased by default. To get the best quotes on your premium amount, make use of a car insurance calculator. Also, get quotes from multiple insurance companies. That way, you will have a benchmark amount to measure the others based on and choose the car insurance policy that suits you the best.

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