Just bought a new car and it is time to pay for insurance? Or, are you all set to renew your car insurance? Either way, be prepared to pay more for the premium compared to the last time you bought insurance. Wondering why? Because car insurance premium costs have gone up recently.

Many factors affect the cost of car insurance premiums. While some of the factors are dependent on variables such as the brand and model of the car, driver profile, extent of coverage, and more, some factors are external such as an increase in the base price of third-party insurance by the Insurance Regulatory and Development Authority of India (IRDAI). This would escalate the overall cost of the policy.

Let us look at different factors affecting car insurance premium costs.

Factors affecting car insurance prices

Many factors affect the car insurance price. Rising costs of car repair and medical expenses, inflation, and the increasing number of cars on the road—all contribute to the rising cost of car insurance. In addition, personal factors such as the car you drive, your driving history, the number of claims raised previously, and the level of coverage you want further shoot up the premium cost.

The good news is that you can still protect your pocket with good research and by choosing a motor insurance policy that offers maximum coverage at the most competitive price.

Unlike a few years ago, car repair and spare parts costs have gone up exponentially. Also, after the COVID-19 pandemic-related lockdowns, the number of cars on the roads has gone up.  This has led to a rise in the instances of road accidents and related treatments of individuals. Personal injury claims are among the main drivers for rising car insurance prices. Such claims have put upward pressure on the cost of insurance. Additionally, the COVID-19 pandemic has caused disruptions in the supply chain, which has led to higher prices for many products, including car insurance.

Strategies for staying ahead of car insurance price fluctuations

The rising costs of car insurance premiums are unavoidable, but you can stay ahead of car insurance price changes by keeping a few things in mind when buying car insurance. The things are:

Assess your needs: Be clear about what you need in terms of coverage. Remember, third-party car insurance is mandatory. It is the most basic and cheapest car insurance. Anything above that is optional. So, assess your needs thoroughly before choosing a policy.

Choose add-ons wisely: Add-ons enhance coverage, but at an additional cost. Firstly, you can buy add-ons only with comprehensive coverage, which is expensive compared to third-party insurance. Secondly, you must extra for every add-on you choose. There are many types of add-ons such as roadside assistance and zero depreciation covers; choose what is relevant to you.

Compare policies: Researching and comparing car insurance policies is much easier than you can imagine. So, before you buy a policy, check policies offered by various insurance providers, shortlist the ones that meet your needs, and then compare them so that you know which one is the best deal for your budget.

Use car insurance premium calculator: By using an online car insurance premium calculator, you can find the best permutation and combination of your insurance needs and premium cost. Once you find the most ideal balance, compare policies and services offered by insurance providers, and choose the best option available in the market.

Seek deals and discounts: Always look for seasonal deals and discounts. Many insurance providers offer deals and discounts during different times of the year. Check with your insurance provider if they can give you some monetary benefits on the car insurance price for the policy of your choice.

These tips can help you save money and ensure that you do not spend more than what you need on car insurance.

Conclusion

Car insurance is an important aspect of car ownership. With the change in car insurance prices, it is more important than ever to compare different options and find the policy that suits your specific needs and budget. Also, remember to renew your policy on time to avoid any last-minute hassle and fines. While you cannot skip buying car insurance if you want to use your car on Indian roads, you can surely be smart by choosing a policy that ensures adequate coverage in your time of need.