What Questions Do Car Insurance Companies Ask And Why?

Which is your car model, and what is the year of manufacture?

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.

What is your vehicle number and mobile number?

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.

What do you use your car for?

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.

Where do you stay?

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.

Has your existing policy expired or not?

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.

Do you have an external CNG kit installed?

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.

Did you raise a claim in the last policy period?

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.

How much is your existing NCB?

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.

Is your car installed with an anti-theft device?

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.

Who is the nominee of the policy?

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.

How much Insured Declared Value (IDV) do you like to choose?

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.

Would you like to opt for the voluntary deductible?

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.

Why do insurance companies ask several questions before insuring my car?

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.

What information can car insurance companies see?

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.

What should I not reveal to my car insurance company?

You should reveal all information about your car and previous policy for smoother claim settlements and avoid rejection of claims.