Know what car insurance is for high-risk drivers & factors that insurers consider in profiling policy holders. Check out the car insurance from Kotak General Insurance.
In many countries, the insurance companies determine the car insurance premium based on the policyholder’s risk profile. In India, the practice is still at a nascent stage. However, some insurers are using advanced technologies like AI (artificial intelligence) and telematics to offer better, customised insurance plans at an affordable price.
In this write-up, we discuss car insurance for high-risk drivers, and how risk-based insurance will become a norm in the future.
From an insurance company’s perspective, a high-risk driver is a car owner who raises a claim frequently. This is not good for both the insurance company and the car owner. So, in simple words, if you raise a claim frequently, the loss ratio of the car insurance increases, i.e., the expenses borne by the insurer towards your claim is more than the premium you pay.
Today, there are many advanced devices that help determine the car insurance policyholder’s risk profile. However, not all insurers in India use such technology, instead, they use the following parameters to determine the car insurance premium
Many insurance companies in India charge a higher premium for young drivers as they consider them high-risk drivers. One of the reasons cited by insurers for this is that the young drivers tend to rash drive compared to older individuals, which increases the likelihood of them raising a claim.
The location of your residence has a significant impact on your car insurance premium because in some places the chance of vehicle theft and accidents are higher than others. So, if you live in a particular region where many cases of theft are recorded, the insurer may categorise you as a high-risk driver, and charge a higher premium.
If you have made many claims in a single year, the insurer may consider you a high-risk driver. Moreover, you would lose the all-important no claim bonus or NCB and you would have to pay a higher premium when you renew your car insurance online in the subsequent year.
If you have been categorised as a high-risk driver, you can take the following steps to become a low-risk driver and reduce your car insurance premium.
• Obey all the traffic rules like stopping at the red light, carrying all the valid documents, avoid over speeding, etc.
• Choose a higher voluntary deductible in car insurance. This will help you decrease the premium, and prime the insurer to bear a part of the claim.
• Be alert while driving, and drive cautiously. Avoid driving under the influence of alcohol or drugs.
• Ensure that you always wear the right safety gear and have your seat belt on.
• Avoid taking part in illegal activities like street racing, or use your car for criminal activities.
• Consider installing advanced theft prevention devices in your car.
• Take a refresher course in driving to brush up on the basic concepts of driving a car.
Thus, car insurance premiums for high-risk drivers tend to be higher than the premium for others. If you are looking for the best car insurance policy for your new car, you can consider buying the Kotak Car Secure policy from Kotak General Insurance. The policy helps you get enhanced protection and pays for the first-party and third-party damages. You can visit our Kotak car insurance page to learn more about the policy.