Third party car insurance offers basic coverage against all third party liabilities arising from an accident. Several factors influence the cost of third-party car insurance. Some include:
Car usage
The car insurance prices depend on how much a person drives their car. If you drive less, you will pay less premium due to lower risk exposure—someone who drives fast and has a long commute must pay a higher amount. The more you are behind the wheel, the higher the chances of being involved in an accident.
Driving record
Another important factor determining the prices of 3rd party car insurance is your driving record. A clean driving history makes you a low-risk driver and attracts lower insurance premiums. However, at-fault accidents, serious traffic violations, multiple speeding tickets, or license suspension will increase the price of your third-party car insurance policy.
New and inexperienced drivers belong to the higher risk group and pay higher insurance rates. And those with no insurance plan before are also offered higher premiums.
Driver’s age and gender
The price of a car insurance policy is higher for young drivers under the age of 25 as they are more likely to get into an accident. Older drivers have years of car driving experience, and the insurance company charges less insurance premium.
Female drivers pay less car insurance premiums because they are involved in fewer accidents and DUI (Driving under the influence) collisions and are less likely to cause harm to a third party. They are considered less risky drivers on the road and have a clean driving record.
Type of car
The car’s make, model, and variant affect the third-party car insurance policy premium. You have to pay higher insurance premiums for luxurious and sports cars. A vehicle with a lesser cubic capacity and anti-theft safety devices is eligible for discounts on premiums. The insurers also ask for an increased premium for a diesel-powered car due to its high repair cost.
Geographical location
Your residence area and the location of the RTO also influence the cost of the third-party insurance policy. Due to higher chances of thefts and accidents, vandalism, or fraud in urban areas, you have to pay higher car insurance premiums. Insuring a car in a flood-prone area will also cost you more. Weather trends, litigation cases, car repair costs, medical care facilities, and the condition of the roads in your locality also affect the premium rates.
No Claim Bonus
The discount on the insurance premium is awarded to the policyholder on the renewal of the car insurance policy if they haven’t made any claims in the previous year. If you have not filed a claim during the policy period, you can save at least 20% on the premium amount.
Credit score
The insurance companies consider your credit score while calculating the third party car insurance costs. You will get a low credit score if you have poor payment history, outstanding debts, unsettled credit card bills, tax liens, or bankruptcies. A high credit score attracts low insurance premiums.
Coverage
It is one of the crucial factors that determine the price of car insurance. The coverage offered by a third-party car insurance policy is less, and thus, it attracts lower insurance premiums.
Insured Declared Value
It is the maximum sum that policyholders receive as compensation from the insurers in the event of theft or loss of their car. IDV has a direct impact on car insurance premiums. If the IDV is less, the premium amount will also be less.
In conclusion
Third-party car insurance is a cost-effective and mandatory policy for every car owner. Considering the above factors, you can perform a car insurance online check and buy a policy that is good for you.