Purchasing a vehicle insurance is a necessity, but not everyone can afford it. Given the high rates of premium prevailing today, it becomes a real challenge for those on a budget. However, you can get a cheap motor insurance policy too if you consider certain factors.
These factors have the potential to reduce more than half the cost of your premium. A cheap motor insurance policy not only suits your budget but also gives you quality coverage at a lower rate.
The factors that influence your premium can be classified into car-related factors and driving habits. Let us look at these factors closely and understand how to save cost on premium by considering these factors.
- Safety Rating of the Car
Safety rating is based on features of the car such as automatic seat belts, airbags and traction control. If you own a vehicle with high safety rating, there are lesser chances of damage to the car or physical injury of the driver or other occupants. In this case, you will have to pay a lesser premium.
However, if the safety rating on your car is lower, the motor insurance company can sense risks and impose a higher premium amount. Therefore, in order to lower your premium, it is best to opt for a vehicle with high safety ratings.
- The Type of Car You Own
Apart from the brand or type of the car, the size and age of the vehicle have a huge impact on the premium amount. Branded cars such as Audi, Mercedes and Bentley command a higher premium. At the same time, SUVs need more coverage and therefore the premium for this type is higher.
The age of the vehicle is an equally decisive factor. Older cars have a lesser premium requirement than newer cars. If your car is old with higher mileage you may consider to not opt out of collision or a comprehensive coverage, thus lowering your premium.
- The Amount of Deductible
Deductible is something that you need to understand at the very outset of your insurance policy. This is the portion of loss amount that you are supposed to pay out of your own pocket.
When the deductible is high, the premium is low and the coverage is lesser. However, if the deductible is low, the premium amount is higher and the coverage provided is also more. So it is best to understand the clause on deductible very clearly.
- The Number of Drivers
If you add someone to your policy, you may end up paying a higher premium amount. The amount of premium will be even more if the driver is in his early 20s. Drivers in the age group of 18-30 are considered as a vulnerable group and the cost of insuring them is more.
Therefore, you must be very discreet about who you want to add to your policy and be very sure of his driving habits and records.
- Your Driving Record
If you have been involved in accidents previously and have filed many accident claims, the motor insurance company becomes sceptical about you. It will have the opinion that you will continue the same way and make more claims.
If your driving record is not satisfactory, the insurance company may not give you any insurance or charge a high premium rate.
On the other hand, if you have an impeccable driving record with no car insurance claims and no accident involvement, the insurance company will prefer you. It may give you the best policy with a discount on the premium rate. You can make a motor insurance claim in case of a mishap.
Hence, in order to avail of a cheaper policy, it is best to be well-trained in driving, have good driving skills, drive safely in congested areas and know how to avoid accidents on roads very well.