The Difference in The Premium Amount Paid for Second-hand Cars
As it is known that nothing comes free of cost, so does car insurance. A certain amount should be paid for the car insurance irrespective of whether it is a new car or a second-hand car. Car owners need to pay the premium in the name of car insurance cost. However, it should be known that the premium money of a used car would be different. Read on to know more about some of the factors that are sure to impact on the car insurance of used cars.
The car insurance policy is something that has been declared as mandatory by Indian law. Other than protecting the car from any accidental issues, it would also help to cover up for any losses such as natural calamities, accidents or others. The premium amount to be paid would depend on a number of factors. Therefore, when planning to buy used Ciaz for sale in Bangalore, the following information will help you pay for the right insurance premium amount. Below some of the factors are mentioned that make the premium vary.
Insured declared value
By the insured declared value of the car, you get to know about the current price of the car. The IDV is known as the highest money which is paid by the owner of the car insurance policy. In case of loss of the car, this is the maximum amount to be paid to the car owner by the insurance company. The loss situation can also show up in case the car is stolen or damaged within the mentioned time of the policy. There are certain instances in which the market price of the car can reduce with passing years.
In such the premium prices or the IDV involved with the car would also decrease. These changes will continue with the changing price of the car in the market.When a claim is issued by the car owner within the insurance period, the IDV is considered as the highest value that the insurance company will provide to the car owner. The insurance premium would increase with an increase in the IDV. Also, for any old car, the premium amount would decrease.
Types of coverage involved
The premium amount of the second-hand car would depend on the benefits and coverage that is offered and included under the car insurance policy. It is also known that in the case of comprehensive insurance, more coverage is offered by the company. It is more beneficial for the owner of the company compared to any third party insurance company. The third-party insurance provider will not include any losses for accidents of the car. Therefore, it is obvious that comprehensive car insurance is better as compared to a third-party insurance company.
The car insurance premium amount would also depend on the location where you have bought the car. In case the location is known for problems of thefts or natural calamities, the insurance money will depend accordingly. A higher premium is applicable in cities having traffic density. In these areas, chances of accidents are high. Therefore, the premium amount would depend accordingly.
No claim bonus
When the owner of the company does not make any claim in a year, it is treated as a bonus and therefore, the company given an incentive amount. It is known as no claim bonus that accumulates for the consecutive year as well in case no money has been claimed by the car owner. In case of a claim, you will not get any incentive in the name of NCB. Therefore, you will have to pay a higher rate of premium in the following year. In this way, the NCB can decide on whether you have to pay for a higher or lower amount of premium for the car insurance.
Use of the car
The second-hand car purchased can be sued for both commercial and personal use. Commercial use involves more accident issues. Therefore the rate of insurance needs to be paid for it. However, the premium policy of both commercial and personal use can vary depending on different factors.
Fuel type used in the car
The engine of the car is also an important factor, including the type of fuel used in the car. Often the insurance premium depends on the type of fuel used in the car. It is almost the same in the case of a new car and a second-hand car. If the car is run on CNG cylinder, the owner of the car might have to pay a higher rate of the premium compared to diesel or petrol.
Add-on covers included in the premium
These are additional costs that are included in the insurance policy. These would provide additional coverage. Due to this, you may have to pay a higher rate of the premium amount. For a second-hand car, you can take the decision whether you wish to take the add-on or not.