In common terms, the Insurer Car Value also is known as ICV of the vehicle. It is the current valuation of the vehicle in the market. It is the maximum amount of compensation you can claim from the insurance company in the event of complete loss of vehicle due to theft or accident. It plays an important role in determining the premium for the insurance policy.
This Article will help you to get a Clear Understanding of ICV and how it affects the car insurance Premium.
Factors that Affect the ICV of Vehicle
There are Many Factors that Affect the ICV of a Vehicle. Listed below, are a Few Factors:
- The first thing that is taken into consideration is the size of the vehicle. In this regard, small-sized cars and large-sized cars fall under different categories.
- Apart from that, the showroom price of the car is also taken into consideration.
- Other than that, the age of the car also matters a lot as higher depreciation is applicable to the old vehicles. It means that you get less value for your car as it ages.
Based on the Factors Mentioned Above, the Car Insurance Providers Compute ICV and Charge Insurance Premium Accordingly.
How ICV Affects the Premium of Car Insurance Policy?
In simple terms, vehicles with higher ICV attract a higher insurance premium rate and vehicles. At the same time, a lower ICV doesn’t attract a lower insurance premium rate. It is because of the applicable rate of depreciation.
Why Insurance Premium Goes up Even as ICV is Decreased?
You must be wondering why?
Well, it is because there are many reasons why the insurance premium goes up as the vehicle’s ICV is decreased.
- Repairing old vehicles may cost more as it can be difficult to arrange the required spare parts. Even if you get them, they may come at an expensive price. As a result, it increases repair costs.
- Apart from that, the need for an old vehicle for repairs is more than the new ones. For this reason, the insurance companies charge a higher premium to cover old vehicles.
Being a Car Owner, you Should Understand the Points Mentioned above Carefully while Buying motor insurance in Dubai for your vehicle.
Simple Tips to Reduce Premium for Car Insurance
As an insurance buyer, if you want maximum bang for your bucks, you can easily reduce the premium amount for your car insurance policy when you follow these simple tips:
- The car insurance companies encourage safe driving and charge a low premium from the policyholder when they don’t file any claims for the previous year. You can get in touch with providers for motor insurance in Dubai to know about the best deals for your vehicle.
- In this way, if you continue to drive safely and file no claims in a policy year, you can expect a significant reduction in premium rates as you will be eligible for availing ‘No Claim’ bonus or discount.
- Installing safety gadgets in your vehicle such as anti-theft locks can help to increase the vehicle’s security. It reduces the risk of exposure of the vehicle. As a result, it attracts less insurance premium.
Wrapping it up
Now you have a basic idea about ICV and how it affects the premium of your policy. If you want to buy a car insurance plan in the UAE, clarify all your doubts before zeroing on an insurance plan. You can get in touch with the customer care support of your preferred insurance company, they will guide you to choose the right policy suited for your vehicle. In this way, you can ensure that you will get the best value for your money in the long run.
Before you finalize a plan, compare various plans so that you can make a well-informed decision. Ideally, you should opt for a plan that provides you with the best insurance coverage at the best insurance premium.