Any car owner knows that car insurance is mandatory to drive a vehicle on the streets. However, that is not the primary reason that car insurance should be purchased. The best reason to buy car insurance is to eliminate the financial burden and the emotional stress that an accident can cause. The coverage against repairs required to your car after an accident takes care of the financial burden. Whereas, the assurance that the accident will not hurt your pocket lowers the stress that you would have.
However, you can enjoy these benefits if you buy the right car insurance for yourself. This, in turn, requires you to know all the factors that affect insurance coverage. If you fail to do so, you end up making an uninformed buying decision. This can lead to a tricky situation where you get stuck paying for insurance coverage that doesn’t fit you well. One of these factors can be your car itself. Here is a look into how your car type insurance affects your car insurance:
Why does car type affect car insurance policy?
The key to buying car insurance is to buy a good policy for a good price. Where a good policy means as much coverage as possible, a good price means as cheap of a price as possible. However, it works differently at the end of the insurance provider. An insurance provider measures how much coverage can they offer without putting their own system at risk. Their risk is promising coverage to a customer that has a higher chance of getting into an accident. If they do offer coverage, they look to be compensated for the risk they take.
Simply put, some cars are considered dangerous to cover. Hence, to compensate for this danger, insurance providers charge higher premiums. A car can consider to be dangerous due to a whole range of factors. This can include factors like size of the car, top speed of the car, or missing features like airbags among many others. If such a car gets into an accident, it would require more money to repair them. Moreover, if the driver is injured and has bought personal accident coverage, the insurance provider would have to cover medical bills as well. Hence, the technical and safety features of the car have a huge effect on how much car insurance will cost you.
Factors related to car type that affect car insurance
- Vehicle’s Age
An older car is more likely to have mechanical failures on the road or get into an accident. This means it is a risk for the insurance provider to offer coverage for it. To cover that risk, the insurer will either offer lower coverage or ask you for a high premium for regular coverage. Moreover, a car is a depreciating asset. This means its value decreases with age. Hence, if you have an older car, your IDV will be much lesser.
- Car model
Not every car is made the same. Hence, the coverage for every car will be different. Thismeans that even though two cars belong to the same vehicle class, some models will be more expensive to cover. Different car models have different market values due to their make, features, etc. For this reason, different car models can be cheaper or expensive to cover.
- Car brand
A costlier and popular car will need a higher premium for insurance coverage. A costlier and unique vehicle means that it will cost higher to repair it. For example, repairing a Porsche will cost much more than repairing a Hyundai. Moreover, an expensive car poses a higher threat of theft. In the scenario that your expensive car gets stolen, the insurance provider would have to pay an extremely huge amount as IDV. All these factors combined make covering the vehicle a huge risk for the insurance provider. Also, expensive cars are costly to repair.