Hatchback vs. Sedan: How Vehicle Type Affects Your Insurance Premium

When it comes to buying a car in India, hatchback vs. sedan has remained an age-old confusion for car buyers. However, the difference between these two vehicle types goes beyond just size, design, and comfort; it also affects how much you pay for car insurance.

For instance, the car insurance premium for a hatchback is generally lower than that of a sedan. But when it comes to features, sedans are the most common choice. 

So, if you are also confused about which type of car to buy based on the insurance premiums, this guide is for you. Here we will break down how your choice between a hatchback and a sedan can impact your car insurance premium.

Auto insurance premium rates are set based on several parameters, including the model and make of the car, engine size, safety features, age, location, and most importantly, the type of car.

Hatchbacks and sedans differ with respect to several factors that determine these parameters:

These variations affect the Insured Declared Value (IDV) as well as the risk profile, which in turn affects the premium.

Hatchbacks like Maruti Suzuki Swift, Hyundai Grand i10, and Tata Tiago cost less than sedans. The lower market price means a lower Insured Declared Value (IDV), the maximum sum insured in case of total loss or theft.

Since IDV is a direct consideration in determining the premium, hatchbacks will have lower insurance premiums.

For instance:

Sedans are performance and comfort-oriented vehicles. Cars such as the Hyundai Verna, Skoda Slavia, or Honda City provide greater engine power, advanced infotainment units, and luxury features. All these features power up the IDV and, therefore, the basic insurance premium.

Moreover, sedans tend to be more expensive to maintain and repair, a factor that insurance companies take into account when calculating the premium. The greater the cost of repair or replacement of parts, the greater the claim value and hence the insurance premium.

Insurance companies also take into account the average repair cost and claim frequency of a car type.

According to reports from different Indian car insurance providers, hatchbacks register about 10-15% lower settlements on claims than sedans, owing to the lower severity of losses and cheaper repairs.

There are some sedans that are equipped with advanced safety features such as airbags, ABS with EBD, electronic stability control, and lane assist. These lower the chances of accidents and also help keep premiums lower to some extent, but drive up repair costs in case of claims.

In hatchbacks, fewer safety features could lead to greater third-party risk but less own-damage cost, balancing the premium.

Moreover, add-ons such as zero depreciation, roadside assistance, and engine protection are not mandatory but determine the final amount payable.

While comparing Hatchback vs Sedan insurance premiums, the rule of thumb is that sedans are more expensive to insure because they have a higher IDV, engine capacity, and repair rates than a hatchback. But not every hatchback is cheaper. Certain premium hatchback variants sometimes even command higher prices than base-level sedans.

Overall, the insurance premium for hatchbacks and sedans varies based on several factors, such as the make, model, fuel type, engine capacity, repair cost, and your insurance coverage.