How does Auto insurance provider in India determine the premiums: There are different approaches to calculate premiums for your Auto insurance in India. It depends upon the service provider you have opted for.
Though the approaches for such calculations vary a great deal, the factors that are taken into consideration are the same on most occasions.
The age of the vehicle, its class and cost of spares is one of determining factor in calculating the premiums. For example, renewing the premium of your old car will cost you more as compared to your new car.
Similarly, if the spare parts of your car are costly, then the premium too would be costlier. A large car with excellent safety features will invite lower premiums as compared to cars without safety equipments.
It is also generally observed that luxury cars and other heavy vehicles tend to have higher ranges of claims and hence are associated with larger premiums.
Usage of vehicles too can determine the rate of premium. Most insurance companies in India dictate 12,000 miles as average mileage per annum. This is calculated based on the assumption that the driver uses the vehicle between his workplace and his home. If the distance covered in through densely populated area, chances of accidents and thefts too will be high.
This in turn will invite higher insurance rates. However if the vehicle were to be driven in a rural area with lesser density, chances of accidents and thefts happening is greatly reduced and hence will invite lesser insurance rates and so on.
Age and Gender of the driver too will be taken into account while determining the premium rates. Drivers above 25 years age tend to invite lesser premium rates as compared to drivers below 25 years. Similarly, females invite lesser premium rates as compared to males.
This is because they are considered safer behind the wheels. Other factors that used to determine premium rates for Auto insurance are Place of residence, Driving habits and track record and so on.