In India, the Motor Vehicles Act makes it mandatory for every car to have a four-wheeler insurance policy that offers coverage against third-party liabilities. The premium rates for third-party liability-only policies are determined by the Insurance Regulatory and Development Authority of India (IRDAI) and are based on the engine capacity (cc) of the vehicle. However, you can also opt for a comprehensive car insurance that offers coverage from third-party liabilities plus damages to the insured car. Insurance providers determine the premium of these policies based on a range of factors, including the age of the owner-driver.
There are numerous factors that influence the premium of a car insurance plan. These are:
- Age of the owner-driver
- Driving history of the owner-driver
- Usage of the car
- Your geographical location
- Gender of the owner-driver
- Type of coverage
- Sum Assured
- Credit history of the owner-driver
- Insured Declared Value of the car, etc.
In this article, we will talk about the age of the owner-driver as a factor determining car insurance rates.
How Does the Age of the Owner-driver Impact Car Insurance Rates?
Insurance companies define a list of parameters that impact the risk of the car getting into an accident or mishap. They use these parameters to determine the premium rates based on the risk assessment.
Talking about the age of the owner-driver, younger individuals below the age of 25 years are usually considered to be high-risk drivers since they have a tendency for risky behaviour, including:
- Speeding
- Driving at night
- Lack of driving experience
- Not wearing seat belts
- Ignoring traffic rules
- Driving under the influence of alcohol or other substances
- Driving while distracted, etc.
While all youngsters might not display these traits, they are most commonly found in drivers below the age of 25-30 years. Hence, insurers tend to charge a higher premium for car insurance policies offered to such drivers.
How Much Does Car Insurance Drop After 25?
Most insurers offer lower premiums to drivers over 25 years of age because such individuals do not usually display the high-risk behaviour of youngsters. While the percentage of the decrease in premium can vary between insurers, it can drop up to 20-30%.
What can I do to Reduce My Car Insurance Premium After 25 Years of Age?
While the insurer will offer a reduced premium on the insurance for the car, you can follow these tips to further reduce car insurance rates:
- Research the market and compare car insurance premiums to find the most cost-efficient policy
- Try to pay the entire annual premium in one go. Some insurers offer a discount of up to 15% for complete premium payments.
- Look at the voluntary deductible aspect and choose a deductible amount based on your use of the car. A higher deductible would mean a lower premium. However, this would also mean that you would have to pay a higher amount out of your pocket at the time of a claim. Hence, choose the deductible carefully.
- Insurers tend to look at the driving record and claim history while determining the premium of a car insurance plan. Develop a safe driving style and try to avoid accidents and mishaps. Also, avoid filing a claim for minor damages. This can help achieve the No Claim Bonus, which reduces the premium liability.
- Install anti-theft and anti-collision devices that are approved by the insurer to get further discounts on the policy.
Summing Up
As a young driver, you might have to pay a higher premium for a car insurance policy. You can use the tips mentioned above to reduce the premium. You can also ensure that you have a clean driving record and minimal claims. This tells the insurer that you are a safe and responsible driver. With such a track record, you can expect a sizeable reduction in premium after you turn 25. Also, make sure that you look at other insurers and compare features and premiums to find the most effective and cost-efficient policy. Good Luck!
