Driving Behaviour and its Impact on Car Insurance Premium

Car insurance in India is mandatory as per the Motor Vehicle Act, 1988. There are many insurers offering car insurance policies for different premium amounts, but as a customer, you should be aware of how the premium of your car insurance policy is decided. One of the major reasons is your driving behaviour.
Let’s understand the link between driving behaviour and insurance premiums so that you can save money while driving safely.
Why Driving Behaviour Matters
Every insurer will assess the level of risk associated before finalizing your car insurance policy. Given the challenging driving conditions in India, it is important to go through your past driving record to check whether you were involved in accidents frequently or not.
Here’s a closer look at how your driving behaviour affects your car insurance premiums and the key factors considered in the Indian context.
1. Speeding and Rash Driving
Over-speeding is a common issue in India. If your vehicle number has multiple challans for the same, your insurer might charge you with a higher premium. Driving responsibly will lower the risk of getting into accidents and paying fines every now and then due to rash driving.
2. Frequent Claims History
Every insurer offers a No Claim Bonus (NCB) as a reward to the insured for claim-free years. Filing for frequent and small claims suggests that you are a reckless driver and significantly impacts your driving and claim history. A safe driving history and fewer claims, you can enjoy NCB rewards with up to a 50% discount on car insurance premiums.
3. Traffic Violations
The advanced surveillance systems in all major metropolitans have given easy access to insurers to check for traffic violations. Even the Insurance Regulatory and Development Authority (IRDAI) now allows the insurance companies to check the violation history of drivers through the National Crime Records Bureau (NCRB), which helps them to determine the premium depending upon the frequency of violations registered by you.
4. Driving Under the Influence
Irresponsible driving behaviour like drunk driving or drug abuse, clearly indicates your carelessness. Such offenses can lead to hefty fines, suspension of a driving license, or even imprisonment in some cases. If such records are found by your insurer before the purchase of a car insurance policy, the premium is likely to skyrocket.
5. Geographical Impact
Driving in areas like Delhi or Mumbai, where congestion and road rage are common, is likely to affect the premium of your car insurance policy. The location where you drive is also considered while calculating the premium amount.
6. Vehicle Usage and Mileage
The purpose for which the vehicle is used influences the premium. If you regularly drive on longer routes or use the vehicle for commercial purposes, you fall in the high-risk category. This can lead to a higher premium amount as you are much more exposed to the risk.
7. Age and Experience
Those who are younger drivers and have less experience are more prone to mishaps like collisions or accidents. On the other hand, seasoned drivers with clean driving records can avail themselves of lower premiums.
Ways to Lower Car Insurance Premiums
Other than driving behaviour, there are other factors as well that influence the premium of your car insurance policy.
Voluntary Deductibles
A deductible is the amount that you first pay out-of-pocket before your insurer covers the remaining amount. When you opt for a higher deductible, you reduce your premium considerably. While this reduces your premium, you must ensure that the deductible amount doesn’t become a burden at the time of claim.
Anti-Theft Devices
Having anti-theft devices like dashcams, alarms, steering locks, gear locks, etc., lowers the chances of theft. This can lower the premium as you have measures in place to mitigate theft risks.
Select Only Necessary Add-Ons
You get a choice of add-ons with your car insurance policy that help you to enhance your basic coverage. Some popular add-ons include zero depreciation, engine protection, or roadside assistance, but these add up in the premium. Assess your needs and choose those add-ons only that you require the most.
Conclusion
Driving in India amid the bustling traffic can be a challenge, and that’s why having car insurance becomes a must. With little precaution, you can ensure your safety and also save money on car insurance premiums by driving responsibly and adhering to traffic rules.
Disclaimer:
The information in this blog is for general purpose only. Car insurance premiums can vary depending upon the coverage opted for, location, make/model of car, add-ons, Insured Declared Value (IDV), and other factors. It is advised to thoroughly understand the policy inclusions and exclusions before finalizing your car insurance policy.