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Know Why the Insurance Premium For Your Car Rises Every Year


The depreciation of a car’s value is a well-known factor that has an effect. However, there are a number of other variables that may cause the car insurance online premium to rise. Third-Party insurance premiums are typically increased by the Insurance Regulatory and Development Authority of India (IRDAI) on an annual basis. Since comprehensive car insurance online requires third-party coverage, premiums will inevitably rise.

Learn about the factors that affect car insurance premiums and how to reduce them by reading on.

Reasons for the Increase in Car Insurance Premium

The Insurance Regulatory and Development Authority of India (IRDAI) is in charge of regulating insurance policies in the country, especially third-party car insurance. Third-party car insurance is required which covers responsibility for claims made by third parties as a result of accidents. Until the premium rates, the IRDAI reviews premium rates every year, taking into account the amount of claims filed and insurance company loss ratios.

The digital age has made insurance purchases more effective and fast in recent years. In the future, when providing car insurance online policies to customers, especially comprehensive coverage, the insurer may take into account the following factors:

  • Driving Habits

To determine the premium rate, insurance providers use artificial intelligence and data-driven techniques to understand driving patterns. Although this method of evaluation is still in its infancy in India, it has the potential to become one of the most important factors in determining whether your car insurance premium goes up or down.

  • Raising a Claim

The premium rate is determined by the amount of claims filed or the policyholder’s claims history. In order to distinguish between legitimate and false claims, insurers will look at the claims history.

Why Do Vehicle Insurance Companies Raise Premium Rates?

Until revising premium rates, insurance providers weigh a variety of factors. The factors that insurers are most likely to weigh before revising rates are listed below:

  • Claim history.
  • Insured’s venue.
  • Insured Declared Value (IDV).
  • Changes to the insurance policy’s terms and conditions.

How is the Car Insurance Premium Calculated?

The online car insurance calculator makes it easy to figure out how much you’ll have to pay for coverage. The insurer would be able to have multiple options to choose from simply by presenting car information and previous insurance policy details.

Wrapping Up

Since third-party car insurance is mandatory under the Motor Vehicles Act 2019, you can opt for a comprehensive car insurance policy such as the one offered on Finserv MARKETS. Bajaj Allianz car insurance offers coverage against natural and man-made disasters such as earthquakes, thefts and others. You can also get access to round-the-clock roadside assistance to help you repair or rebuild any part of the car damaged during an accident, thanks to the large networks of stores across India.