Business

Know What Affects the Renewal Cost of Your Car Insurance

You must be aware of the fact that it is mandatory for every car owner to purchase a third-party liability insurance plan. Insurance policy for your car is important as it will protect you against the financial losses you may incur due to eventualities. It is your prime responsibility to purchase an insurance plan and keep it updated too. Driving a car without an active insurance plan is a punishable offense. You may have to suffer penalties and legal liabilities if you do so. To avoid these, you should see to it that insurance renewals are done on time.

Sometimes, you might have observed, the cost of your car insurance plan gets higher at the time of renewal. There are multiple reasons why the cost increases during renewal. The following article will take you through the things that increase your insurance cost.

Whenever you renew four-wheeler insurance, the insurance providers consider certain factors and then calculate the cost.

Car Insurance Renewal

Take a look at the 8 prime things that increase your insurance cost. 

  1. The first thing the insurance provider considers is your driving history. With a good driving history, you can save some money on the insurance cost. The insurance providers will also look into your claim history. A driver who has registered a claim a lot of times indicates that he has been a part of mishaps often. This is a matter of loss for the insurance company. If you have filed many claims and have a bad driving history, your insurance cost is going to be higher.
  2. Change in your address: If you have moved to a new area, the cost of your four wheelers insurance may increase depending on the locality. The location of the driver plays an important role in calculating the insurance cost. The cost of car insurance is higher in urban areas when compared to rural areas.
  3. If you are going to add new drivers to your policy when you attempt insurance renewals, the coverage of the plan also expands hence; the price of the insurance plan will also increase.
  4. The insurance providers offer special discounts when you bundle your policies under them. Consider you have bought homeowner insurance, four-wheeler insurance, and health insurance from the same insurance provider. In such scenarios, the insurer offers a discount on the insurance price. But if you cancel a plan, the discount will no longer be applicable.
  5. Discount on multiple vehicles: If you register multiple cars under a single plan, the insurer offers discounts. So when you withdraw a vehicle from such a plan, even then the discount will not be applicable and thus makes your four-wheeler insurance more expensive.
  6. Change in your job: Sometimes your employer and the insurance companies have ties. Due to this, the employees working for the company will receive extra discounts. When you change your job, discounts will no longer be applicable. This increases the cost of your insurance too.
  7. Miscalculations: Sometimes, insurance providers perform small mistakes while calculating the insurance cost. Hence do not assume that the insurance price calculated by the insurer is correct and the best. Whenever you attempt insurance renewals, check for the quotes, evaluate and make the payment only when you feel the calculations are right.
  8. Changes made to the plan: This is one of the prime reasons why the insurance cost increases at the time of renewal. The structure of your car insurance plan may have been changed. The insurance company might have changed its financial rates or their service charges have been modified. In such cases, the premium or insurance cost is affected. Go through such details when renewing the insurance.

The above factors influence the premium rates of car insurance plans. Hence whenever you renew your policy, make it a point to go through the policy wordings carefully, check the calculations, quotes, compare it with other companies and their plans. This will help you to decide whether to continue the plan with the same insurer or to change to a better plan. In case you feel, the current insurer is offering the best price, you can definitely continue with the same. Also, do not forget to keep track of insurance plans and renew them on time every time. And lastly, remember that it is easier, quicker, and more affordable to get a policy online.

Hope this has been helpful, good luck and drive safe!

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button