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Does Motor Transmission Type Have An Impact On Insurance Premium?

Karen Menezes Karen Menezes 13 October 2016

The saying goes that if you look at the abyss long enough, the abyss looks back at you. Similarly, almost all components and features in the automobile has some impact on the comprehensive motor insurance plan premium.

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Motor insurance is a complex territory. Given the surplus of variables at play, it takes a lot of focus to understand to what extent which factor is responsible to finalize a decision.

Auto Insurance Premium and Factors Affecting

If we take a look at the Insured Declared Value or IDV, for example; it is the main aspect of motor insurance. It is just a matter of time for a policyholder to realize that the IDV depends on the age of the car and the related percentage rate of depreciation.

Another factor that determines the auto insurance premium is the type of fuel that it consumes. In fact, something as seemingly unrelated as the driver’s roadside manners and the policyholder’s vocation, even the city, are known to shape the final insurance premium.

If you are a good driver with a history of no claims, you have earned yourself the privilege called No Claim Bonus discount. If you are a government employee, you will find that you are eligible to attractive additional discounts. If you reside in a locality known to be crime-ridden you will end up paying a higher premium.

Vehicle Transmission Type- The Two Master Types

Transmission is one of the most important features of a vehicle. In easy terms, it is nothing but the mechanism by which the power is transmitted from the engine to the wheels. Without the transmission, the car would simply not run.

Almost all cars on the road today can be neatly categorized into two broad groups; either manual or automatic. In its most basic form, there are a set of gears (a set of toothed wheels) along a pair of shafts (the input shafts and output shafts) in a manual transmission. The gears on one shaft connect with those on the other shaft resulting in a ratio between the gear on the input shaft and the one on the output shaft determines the overall ratio.

The advanced and more widespread, the automatic transmission is simpler. One of the primary differences between the two kinds of transmission is that in an automatic car there is no manual gear changing.

The Hybrid Varieties

Many other types of transmission are getting popular in recent times such as electric cars that usually work without transmission. There is also the dual-clutch transmission, which works on the principle of a manual transmission but has adapted computer control. On the other hand, the continuously variable transmission has no individual gears whatsoever.

Apply the Clutch, Impact the Insurance Premium

If you have a car with a manual transmission from the time of purchase but have been convinced that you want to go in for the automatic transmission at some point in time, you can easily do so. Or vice versa.

However, before beginning the procedure of modification, do check your comprehensive and add-on policy plans to know for sure if this transformation will be covered under the aegis of both or either.

As most auto insurance plan usually offer protection only against theft, accident and calamity (natural or man-made ones), remember modification can be applied to none of the above criteria. So, most times you will discover that modifying your car’s transmission will end up being an out-of-the-pocket expense. If your vehicle’s transmission was damaged due to a covered loss (say an accident); in this situation, the insurer is contract bound to offer you insurance protection for this enhancement, which they will put under repair or replacement of the damaged panel.

Car Modification – A Boon or A Bane?

Modifications are known to have an adverse impact on insurance costs, and they may end up raising your car insurance premiums, at times considerably.

Modifying your car’s transmission can have many reasons that lead to a central one – that of wanting to enhance the vehicle’s performance. But in the eyes of the insurance service provider that is higher risk as they need to cover it as a liability (your car). Let’s see it from the insurer’s point of you. Your car modifications is another expensive feature to be covered under their insurance, which is risky. Enhanced and modified cars may just work like a charm to attract thefts more than regular cars again it’s a risk.


In such a scenario, the insurer will raise the annual premium in a way to ask you to chip in for the ‘modified’ Own Damage insurance expense. Remember, transmission modifications can burden your premium by as much as an additional 45 percent appreciation, a sharp increase if there ever was one.

So, before picking up the tools, it will be wise to check with the service provider the terms and conditions following the modification procedure and the real-time impact on your car’s insurance premium.

Karen Menezes
Written by Karen Menezes
An optimist at heart, Karen loves to see the world through a pair of rose-tinted glasses. An award-winning blogger, she loves to dream with her eyes open. Writing is not her passion, it’s an OCD! If at all she isn’t writing, you can find her shopping online or experimenting with DIY recipes. This lass currently works as a Content Writer at Coverfox.