Fuel type and premium

Out of all the other fuel cars, the petrol car is regarded as the least risky one as the price of the diesel variants and the CNG variant cars are more as compared to the petrol cars. So basically petrol cars have lower premium than the diesel cars and others.

At this Balakrishnan says, “Typically, diesel cars have a higher premium. This is by virtue of the fact that (a) diesel variants of the cars are more expensive, hence the IDV is higher (b) diesel cars are considered 'high usage' cars by insurance companies, and, hence, they have a slightly higher risk associated with them.”

Amitabh Jain, Head of the Customer Service, ICICI Lombard, says, “It has been observed that usage of vehicles running on CNG/LPG is high and, hence, chances of an accident (involving them) are high when compared with vehicles that run on petrol. Therefore, to a certain extent, the risk is high in these cars vis-a-vis petrol cars.”

Parts of the other fuel cars are more expensive than the petrol cars and which increases the cost of car insurance.