Home / Car Insurance / Articles / What Questions Do Car Insurance Companies Ask And Why?
Team AckoNov 30, 2022
When you plan to buy car insurance, you may be required to share some information related to your location, car and previous policy. Insurers do not issue a vehicle insurance policy based on your requirements. Instead, before they issue an insurance policy, they’ll expect you to answer a few questions about your car and a few other personal information. Here is the list of questions car insurance companies ask and the reasons why they ask these questions.
Finalising the right insurance plan for your car can sometimes be confusing, especially if you are insuring your car for the first time. While there is enormous information available online, you may find it difficult to answer a few questions, and this article is to answer those questions.
Your car model and the year of manufacture is the most important question that insurers ask. The model and the year of manufacture is required to calculate the premium or the insurance cost for your vehicle.
The car model indicates the approximate market value of the vehicle, and the year of manufacture helps determine the vehicle’s depreciation. Both these factors are the first and foremost questions that you need to answer.
Your car registration number is vital information required to issue the insurance policy on the registered vehicle. This way, the policy is exclusive to the registered vehicle. Also, your mobile number is essential information for insurers to send notifications and other insurance-related communications.
You may be using your car for commercial or personal purposes. The car insurance premium for commercial cars differs from personal cars. Hence, it is essential to let the insurer know what you are using the car for. Typically, the insurance cost for a commercial vehicle is slightly higher compared to a personal car. Also, your claim can be rejected if your car is used for reasons other than those mentioned in the policy.
This question is one of the primary questions that insurers ask since it impacts the premium rate. Premium rates are based on the location where your car has been registered. Typically, if you live in an urban area, you may pay more than someone who lives in a rural area.
Insurers look at the severity and the number of claims in an area to determine the base rates. Cities typically have more traffic congestion, accidents and crime, which means more claims. Hence, the insurance premium rates in cities are higher than in rural areas.
It is crucial to renew your car insurance policy within the expiry date for the continuity of the insurance coverage. Insurers need to understand if your current policy has expired or not to determine the premium rate for your car. At ACKO, you can renew car insurance online for your vehicle even if it has expired.
The type of fuel being used by the vehicle plays an important role in calculating the insurance cost. If you have installed a Compressed Natural Gas (CNG) kit in your car, the insurance premium will be different from petrol or diesel-powered cars. Insurers may charge an additional premium for insuring the CNG kit.
CNG kits’ maintenance and damage costs are slightly higher; hence, the insurance cost increases accordingly.
When you do not raise a claim during the policy tenure, you receive the No Claim Bonus (NCB). This discount is used on the renewal premium. The discount can go up to 50% if you don’t raise claims for five consecutive years.
Hence, when you renew your car insurance policy, any NCB earned during the policy period will be utilised to discount the insurance cost.
To ascertain the exact discount on the renewal premium rate, you need to provide the percentile of the NCB that you have earned. The NCB discount starts from 20% to 50%, depending on the number of consecutive years you have not raised any claims.
It is advisable not to raise claims for minor damages since submitting any claims during the policy period will nullify the NCB. This will impact the renewal premium rate when you renew the plan.
Knowing that your car is installed with an anti-theft device, insurers are aware that you are taking the responsibility of securing your vehicle to avoid possible vehicle theft. With this assurance, insurers can reduce the premium rate for your car since their liability is lower than a car without an anti-theft device.
The purpose of making a nomination is to identify the person the insurer has to transfer the policy to in case of your demise. Also, if there is an ongoing claim settlement, insurers will settle the claim with the nominee. A car insurance nominee can be your spouse, sibling or children.
The IDV is the approximate market value of the car. While purchasing the insurance policy, insurers will provide the IDV for your vehicle. You have the option to increase or decrease the value. Please note that increasing the IDV will increase the premium, and lowering the value will reduce the claim amount. Choose the right IDV to get the correct payout during the claim settlement.
In motor insurance policies, there is a mandatory deductible. You have to bear a particular portion of the repair bill during claim settlements. There is also a voluntary deductible. You can opt to pay more from your pocket during claim settlements. While opting for the voluntary deductible will reduce the premium, you have to pay more from your pocket during the claim settlement.
Insurers ask questions about your car and personal details to determine the insurance cost or the car insurance premium. Apart from the insurance cost, personal information is required to determine the vehicle’s owner and send notifications and other correspondence.
When you provide your car and personal details, insurers are able to view your vehicle details from a central database. These details include the year of manufacture and the model of your car.
You should reveal all information about your car and previous policy for smoother claim settlements and avoid rejection of claims.
|Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.|
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