Choosing an insurance plan for your car can be difficult considering the sheer number of plans as well as the factors that may cause changes in the prices. These changes in prices, in turn, can also affect your financial budget and the estimated amount that you would have to spend to keep your dream car covered.
The price of a car depends on various factors such as its model and body shape – the same si also taken into consideration when deciding the insurance premium. Let’s understand how your car insurance policy premium is affected by your vehicle’s body shape and other key factors.
Does the Insurance Premium Vary with Car Body Shape?
Generally, cars with a bigger body and more inner space cost more than a car with a smaller shape. With car insurance price directly being related to the price, one can say that cars in the segment of sedans and SUVs would generally have higher premiums than those of hatchbacks.
In the UAE, for instance, cars worth over AED 300,000 carry a cost of 2.75% in insurance premiums. On the other hand, if your vehicle is worth less than AED 100,000, the rate is 3.25%. Similarly, vehicles costing between AED 100,000 and 300,000, carry a 3% premium rate.
Another factor to consider here is that SUVs and sedans tend to have more features and specifications, which again increases their market value. This, as we saw earlier, can lead to an increase in the premium cost.
It’s worth noting that the impact of these factors is more pronounced on comprehensive car insurance than third-party insurance plans. The cost of the latter type of insurance, which covers only third-party damages and liabilities, mainly depends on the engine and the price.
What are the Factors Influencing Car Insurance Premiums for Your Vehicle?
Besides the body type, here are the other factors affecting the car insurance premium –
- Type of Fuel Used
Vehicles using petrol are generally more affordable compared to their diesel-run counterparts. This results in the insurance price of petrol cars being lower than that of diesel cars, with car prices affecting the insurance rates as discussed earlier.
For instance, if the prices of the petrol variants are nearly the same, the insurance premium of a diesel-run sedan can exceed that of a petrol-run SUV. Note that you can expect further changes in the insurance premium if you install CNG or LPG kits in your car.
- Manufacturing Date or Year
The manufacturing date or year of your car is a key factor in determining the car insurance premium in your case. This is because of depreciation, which is caused due to regular wear and tear of various car parts.
Usually, the premium of old cars is less as the effect of depreciation reduces their value, based on which the premium is calculated. On the other hand, new cars attract higher premium values as they have undergone minimum to no depreciation.
With that said, you can expect changes in the premium as per the condition of the vehicle as well. For instance, if your vehicle is old and second-hand but has undergone significant damage, the premium can shoot up in this case.
- IDV or Insured Declared Value
The estimated current market value of the insured car is referred to as the Insured Declared Value (IDV). This value is decided by the insurance-providing company after examining your vehicle when you buy or renew your insurance plan. It is usually calculated by subtracting the depreciation amount from the original price as per its age.
With IDV in the picture, there can be considerable variations in insurance premiums. This is especially the case if we consider the accessories that have been added to the vehicle after the purchase, which increases the IDV and, correspondingly, the insurance premium.
- Capacity of the Engine
The capacity of a car engine or cubic capacity (cc) is another factor influencing the premium value of an insurance policy. A vehicle with a bigger engine will have a higher market value and, hence, its insurance premium will be on the higher side.
- Location of Purchase
The location from where you are purchasing the car and getting your insurance policy also affects its premium value. Generally, places that are prone to accidents or theft due to inadequate infrastructure attract higher premium values for vehicles sold there.
Besides the factors related to the vehicle, your profile as a driver (including your age, driving experience, accident history, and more) also impacts the car insurance prices. So if you are a young driver or have a history of car accidents, you would be charged a higher premium compared to an individual with considerable driving experience or a clean driving record.
Sedan, SUV, or Hatchback – Which One is better?
While discussing the role of the car type on insurance, it’d be also worthwhile to understand which one is the best type for you. Here are the factors and differences to consider between the given car types –
|Basis of Comparison||Sedan||SUV||Hatchback|
|Budget||Moderately priced||Costlier than Sedans and Hatchbacks price||Budget-friendly|
|Interior Space||Spacious cabin||Spacious cabin||Compact cabin|
|Rear Visibility||Low rear visibility||Clear rear visibility||Clear rear visibility|
|Fuel Efficiency or Mileage||Lower mileage due to heavy weight||Lower mileage due to heavy weight and body length||Higher mileage due to less weight|
|Dimensions||Medium sized||Large sized||Small sized|
|Riding Stability||Better on highways and wider roads||Better on highways and wider roads||Better during traffics and on narrower roads|
|Ground Clearance||Low ground clearance ideal for driving in cities||High ground clearance gives improved sight and terrain mobility||Low ground clearance makes it more maneuverable than SUVs|
Sedan, SUV, and Hatchback – What are their Advantages and Disadvantages?
Let’s have a look at the key advantages as well as disadvantages of each car type here –
- Elongated space for storage which allows a comfortable journey on the rear side
- Good insulation that ensures less noise and vibration for a comfortable journey
- Smooth and comfortable drives due to powerful engines
- Stylish appearance and elegance
- Good stability at higher speeds, especially on the highways
- More fuel is consumed due to their heavy weight
- More expensive than hatchbacks and other car models
- Low rear visibility, especially while parking in reverse gear
- Difficult to drive through small spaces and while in traffic
- Generally have a low resale value comparedto their high prices
- More cabin space and legroom ensure a high level of comfort, which can be especially beneficial for long drives
- Adequate front and rear view that enhances safety and avoids collisions
- Good stability on the highways when the speed is high
- Insulation technology that absorbs noise and vibration and provides a comfortable journey
- Stylish appearance
- Costlier than most cars in the market including Hatchbacks and Sedans
- High fuel consumption due to large size and heavy weight
- Budget-friendly with a low maintenance cost
- Suitable for beginners as they havelow chances of collision due to excellent front and rear view as well as low speeds
- Their compact design makes it easy to drive on narrower roads and intraffic
- Great resale value when compared to other cartypes
- Low fuel consumption due to low weight
- Their compact design may lead to insufficient storage space and/or legroom
- Low engine power and less interior may lead to an uncomfortable journey, especially over long distances
How to Apply for Car Insurance?
With numerous online insurance portals available in the UAE, you can easily apply for car insurance online. However, finding the best plan for your vehicle by exploring each site and switching tabs can be tedious and time-consuming.
To get car insurance from the most reliable platform and find all the top plans in one place, you can visit policybazaar.ae. This website hosts numerous plans and makes it quite convenient to compare them before getting one, which ensures that you get the best plan as per your requirements.
While the body shape and the type of your car play a key role with respect to the insurance premium for your car, several other factors impact the premium as we saw above as well. For this reason, it is crucial to conduct thorough research before getting an insurance plan for your car in the UAE.
You can always turn to online car insurance calculators and find the premiums for different cars, models, etc. These calculators allow you to tweak the details and find the insurance cost in multiple scenarios without any difficulty!