Insurance is like a spare tyre. You may not require it, but not having one is not an option.
  • Car Insurance Premium Calculator

    In recent times, owning a car has not only become a status symbol but also a necessity. A car is an asset that is seen as a milestone in everybody’s life. A prudent choice to make after buying a car is obtaining a car insurance. A comprehensive car insurance cover will act as a financial safeguard against unexpected accidents and minor mishaps on the road. A car insurance is mandatory in India by law and it will also ensure that you and your vehicle stay safe always.

    What is Car Insurance Premium Calculator?

    • Car insurance premium calculator is a dynamic tool provided, online, by car insurance companies.
    • Almost every reputed motor insurance company has an insurance premium calculator on their official portal.
    • With the help of the car Insurance calculator, customers can get a quote for their car insurance policy and the premium amount they need to pay for the same.
    • Just visit the ‘car insurance calculator’ page and fill in some basic information about yourself like the policyholder’s name, contact details and address, followed by some standard details about the insured/to be insured car.
    • These details are – car manufacturer’s name, model number of the car, manufacturing year, car sub-type (if any), fuel type and registration date.
    • Some companies also give you an option of selecting if you want to insure the accessories installed inside the car.
    • After you have filled the details correctly, just click on the ‘calculate premium’ button and you will immediately get the quote.
    • After this, you also get an option to get more information and payment option to buy car insurance of your choice.

    How is the Car Insurance Premium Calculated?

    This simple formula will help you understand the Car Insurance premium calculation better. Premium = Own Damage Premium – (No claim bonus + discounts) + Liability Premium as Fixed by the IRDAI

    A sample car insurance calculation is described below for your understanding.

    Year of Manufacture 2012 Comprehensive Policy with NCB (all values in Rupees)
    Ex Showroom Price 4,16,000  
    Depreciation Percentage 20% 83,200
    Insured Declared Value (IDV) 3,32,800  
    Own Damage Premium 1.970% 6556
    NCB discounts 20% 1311
    Total OD Premium 5425  
    Personal Accident Cover 100  
    Legal Liability Paid to driver 50  
    Compulsory Third Party Cover 1110  
    Net Premium 6505  
    Service Tax @ 14% 14% 911
    Total premium 7416  

    Factors that affect the Car Insurance Price

    1. The premium of car insurance depends on the following factors.
    2. IDV (Insured Declared Value) of the vehicle
    3. Type and age of the vehicle
    4. Cubic Capacity of the engine
    5. Geographical zone

    Car Insurance Premium Calculated On The Below Mentioned Fators

    A “Package Policy” has two main components namely ‘Own Damage premium’ and ‘Liability Premium’. It is important to note that liability Premium is fixed by the insurer. It is the minimum statutory premium to be paid as fixed by IRDAI (Insurance Regulatory and Development Authority of India).

    Let us look at some important components that influence th

    • Insured Declared Value or IDV of the Vehicle
    • At any point, your car is worth some value. Assuming you had insurance for your car, the value will help the insurance company decide on the compensatory amount. IDV will decide the value of your vehicle at any given point of time under a comprehensive car insurance cover.

      Simply put, IDV is the maximum amount that you can claim for any loss or accident of the vehicle. It is one of the important factors that greatly affect the premium.

      IDV = Ex-showroom price of your car + cost of accessories (if any) – depreciation value as per IRDAI

      Depending on the age of the vehicle, the depreciation ranges from 5% to 50% of the ex-showroom price.

    • Cubic Capacity (CC) of the Vehicle
    • The premium amount also depends on the engine power of your car. More the cubic capacity, more will be the premium.

    • No Claim Bonus (NCB)
    • In order to reward policyholders for being a responsible driver, insurance companies have come up with the concept of No Claim Bonus. You are entitled for a NCB discount if you have not made a claim the previous year. If you have a NCB component in your policy, you can save up to 50% on the Own Damage (OD) premium.

    • Discounts
    • There are some additional discounts that are offered under Own Damage Premium. Installation of anti-theft devices like a car alarm, membership of Automobile Association of India and opting for voluntary deductible or excess will fetch you discounts on the premium.

    • Loadings
    • Any electrical or electronic accessories that is fitted to the vehicle like CD/DVD Players, CNG or LPG units, but is not included in the manufacturer’s selling price of the car is insured at an extra amount

    Tips to Reduce Car Insurance Premium

    1. No Claim Bonus is an easy way to progressively reduce your premium. For example, consider the following scenario where because of NCB, the premium is being lowered gradually.
    2. IDV of the Vehicle Premium – with NCB discounts Premium – without NCB
      Year Value in Rs. NCB % Premium Amount in Rs NCB % Premium Amount in Rs
      Year 1 3,60,000 0 11,257 0 11,257
      Year 2 3,00,000 20 9,006 0 11,257
      Year 3 2,50,000 25 7,036 0 9,771
      Year 4 2,00,000 35 5,081 0 9,287
    3. Another way through which you can reduce premium is to become a member of the Automobile Association of India (AAI) and by installing anti-theft and locking devices in your car.
    4. Also, you have to ensure that the IDV of your vehicle is judged correctly before the policy is issued. This will not only ensure that you are being charged the right premium but will also guarantee a hassle-free claim process.
    5. Select your vehicle carefully based on your need. Don’t buy an SUV if you are commuting less than 50kms a month. Remember, the showroom price and CC of your car also add to the premium amount.
    6. Drop any unnecessary add-on covers which will otherwise increase your premium costs.
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