8 Factors That Influence Car Insurance Premiums For Suvs And Sedans


20 May 2022

Read about 8 Factors that Influence Car Insurance Premiums for SUVs and Sedans. Check out the car insurance policy and premium from Kotak General Insurance now.

Under the Motor Vehicles Act, 1988, insurance for your car is mandatory regardless of the type of car you buy. Now, if you have been planning to buy a sedan or an SUV, the car insurance premium to be paid must be one of the things running in your mind. There are a host of factors that influence the insurance premium you pay for your SUVs and sedans. So, let’s take a look at eight most important factors among them.

1) The car model you choose

The car model you select for your SUV or sedan will impact the premium to be paid to receive insurance coverage. If you choose an economical and compact model for an SUV, you will have to pay less premium. On the other hand, a brand new and luxurious sedan is going to come with a higher premium. High-end car models fetch higher premiums as compared to base models. Therefore, if you own a high-end four-wheeler car like sedan, the sum insured is typically higher which in turn increases the insurance premium.

2) The production year of the car

The age of a car is taken into account while calculating car insurance premium. The information of a car’s age comes from the production year of the car. A vehicle goes through wear and tear, which means its depreciation increases with age. At the same time, its market value keeps going down. Due to lower market value, the cost of insuring old cars is lesser than the new ones. At the same time, new cars come with a higher insurance premium because they have a higher market value and less wear and tear.

3) The type of car engine

Since the cost of car with diesel engine is high, the car’s Insured Declared Value (IDV) also tends be higher. This in turn increases the overall cost of the car’s insurance. In simple terms, the higher the car’s price, the higher is the insurance premium. It is also important to note that the cost of repairing a diesel-based car is also high.

4) The capacity of car engine

A vehicle’s engine capacity is denoted by cubic capacity (cc), and it has a major impact on the premium rate of car insurance. As such, a lower cc leads to a lower premium and vice versa. The reason is simple – a car with a higher cc can produce a higher output, which means it's more vulnerable to accidents. Thus, the premium goes higher.

5) Registration location of a car

Where your car is registered also has an important role to play in the premium you need to pay. Every region in the country has a different risk level based on the total number of registered vehicles and accidents happening in that place. Based on this aspect, the entire India has been divided into two zones – zone A and B. So, zone A is for the metro cities and the rest of India comes under zone B.

You need to pay a higher insurance premium in zone A because the incidents of accidents and traffic casualties are higher here, which puts the car at a greater risk of getting damaged.

6) Different types of insurance cover

The car insurance price to insure your SUV or sedan is completely dependent on your chosen insurance cover. Going for third-party motor insurance tends to be more cost-effective than a comprehensive insurance plan. A third-party plan is a mandatory insurance cover for every vehicle as per the Motor Vehicles Act. This is basically a liability cover that covers bodily injury, death of third-party, as well as damages caused to the third-party or it’s property.

On the other hand, a comprehensive insurance plan offers coverage for the damages done to the car and a third party. As comprehensive insurance policies offer a wide coverage, the insurance premium available for these policies are higher than third-party insurance.

Furthermore, you get to use extra protection with the comprehensive coverage simply by adding riders for an additional premium. Comprehensive covers are a good idea for any new car.

7) Modifications you make to your car

Modifications that you make to your sedan or SUV also impacts the premium you will have to pay for. If your modifications change the appearance of your car or improve its performance, the value of the car rises. At the same time, the insurance price for the car increases. Say you have altered the engine of the car to increase speed. In that case, you will have to pay a higher premium because it increases the chances of running into an accident. Also, if you change the exteriors of your car to make it look better and more appealing, you might need to pay a higher premium for your sedan or SUV.

8) Installing an anti-theft device

If you install an ARAI certified anti-theft devices in your car to improve its security and reduce the risks of theft, you can expect a decrease in car insurance price.

The endnote

So, now you have a clear understanding of all the things that can change the insurance premium for your car. It’s time to start looking at the suitable insurance policies. Kotak car secure is one such insurance policy that is designed exclusively to provide all round protection to your car. Visit our car insurance page to know more about the premium on your insurance plan.

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.