Insurance is like a spare tyre. You may not require it, but not having one is not an option.
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 insurancepolicy is mandatory in India by law and it will also ensure that you and your vehicle stay safe always.

    Car Insurance Premium Calculator

    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 + Cost of Add-ons

    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  
    GST @ 18% 18% 1171
    Total premium 7676  

    Factors that affect the Car Insurance Price

    The premium of car insurance depends on the following factors:

    1. IDV (Insured Declared Value) of the vehicle
    2. Type and age of the vehicle
    3. Cubic capacity of the engine
    4. Geographical zone
    5. Age and gender of the owner-driver
    6. Fuel type
    7. Profession of the owner
    8. Voluntary deductible
    9. No Claim Bonus (NCB)
    10. Anti-theft device installation

    Car Insurance Premium Calculated on the below Mentioned Factors

    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). The liability premium amount depends on the engine power of your car. More the cubic capacity, more will be the premium.

    The third-party liability premium chart (for private cars) released by the IRDAI for the financial year 2017-18 is as follows:

    Engine Capacity Premium effective from 1 April 2017
    Less than 1,000 cc Rs.2,055
    Between 1,000 cc and 1,500 cc Rs.2,863
    More than 1,500 cc Rs.7,890

    Let us look at some important components that influence the premium of a comprehensive/package policy:

    Use Online Car Insurance Calculator and Make a Prudent Purchase Decision

    A car insurance calculator, apart from enabling you to calculate the premium online, also helps you compare policies between different car insurance providers. This caters to the varying needs of customers, as it helps them evaluate the options available in the market and narrow down on a plan that suits their needs. You can also buy a car insurance policy online in a few simple steps following policy comparison.

    Benefits of Car Insurance Premium Calculator

    • The car insurance premium calculator is easy to use and yields results in a few minutes.
    • You can use it at the convenience of your home and benefit from a hassle-free and paperless policy purchase experience.
    • One of the major advantages of a car insurance calculator tool is that you would not be influenced by insurance agents who, after all, are working towards attaining their sales targets.
    • On the calculator tool, you can change the variables of coverage and see how the premium changes accordingly. The tool is a great medium to educate yourself on the nuances of a plan and hence, helps you in making the best decision at the time of buying a policy.

    Premium Calculation for Used and New Cars

    Every car insurance company uses its own set of parameters to calculate the premium for a policy. However, the factors that are considered by most insurers are listed below:

    • Premium calculator for used cars - The online car insurance calculator tool helps you in procuring the most appropriate auto insurance policy for your vehicle in a transparent and convenient manner. To calculate the premium for used cars, you will have to provide the following details:
      • Type of car
      • Fuel type
      • Details of the existing car insurance policy
      • Registration number of the car
      • Details regarding change in ownership
      • Claims for previous years, if applicable

    The used car insurance calculator tool will show you the premium required to insure the vehicle in a matter of seconds.

    • Premium calculator for new cars - The new car insurance calculator tool provides a listing of top insurers and their car insurance products in a few simple steps. This offers a new car owner the much needed guidance in narrowing down on an appropriate auto insurance policy for his/her prized set of wheels. The details you would have to provide to calculate the premium for insuring a new car are:
      • The name of the car manufacturer
      • The model of the vehicle
      • Year of manufacture
      • Personal details of the owner-driver
      • State of registration of the vehicle

    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.
    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 9287
    1. 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.
    2. 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.
    3. 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.
    4. Drop any unnecessary add-on covers which will otherwise increase your premium costs.
    5. As mentioned above, opting for voluntary deductibles at the time of buying auto insurance is a great way to reduce the premium you pay towards it. If you are a confident driver, you can go ahead with a high voluntary deductible amount. This will bring down the premium by a considerable amount. However, ensure that you will be able to pay the voluntary deductible amount in the unlikely (but possible) situation of a car accident.

    Car Insurance Calculator FAQs:

    1. Do vintage cars receive any discounts on auto insurance premium?
    2. A discount of 50% will be offered on the third-party liability premium of vintage cars. These vehicles should be certified as vintage cars by the ‘Vintage and Classic Car Club of India’ to avail this benefit.

    3. Can I use the online car insurance calculator tool when renewing my auto insurance?
    4. Yes, this is possible. At the time of car insurance renewal, you can compare policies between insurance companies and decide on an appropriate plan using the car insurance premium calculator tool.

    5. What are the benefits of being a member of AAI?
    6. If you are a member of the Automobile Association of India (AAI), you can avail the following benefits:

      • You can get an international driving permit (IDP) issued in your name in a hassle-free manner.
      • The association will guide you through the process of re-registration of vehicles.
      • The automobile association has the power to transfer the ownership of a vehicle. So, if needed, a member can contact the association for the same.
      • The association helps a member in getting his/her address details updated in the driving license.
      • AAI helps you in procuring a duplicate license in case you have lost the original.
      • The association helps you in the renewal of your driving license.
      • You can get a discount on auto insurance premium by being a member of AAI.
    7. How does the IDV of a car reduce with age?
    8. The depreciation of a car increases as the vehicle gets older:

      Age of the car Percentage of depreciation
      Less than 6 months 5%
      Between 6 months and 1 year 15%
      Between 1 and 2 years 20%
      Between 2 and 3 years 30%
      Between 3 and 4 years 40%
      Between 4 and 5 years 50%

      The depreciation of a vehicle is inversely proportional to its Insured Declared Value (IDV). This implies that the IDV decreases as the car ages.

    9. Does the comprehensive auto insurance plan include personal accident cover for the passengers?
    10. No, a comprehensive car insurance policy only offers personal accident cover for the owner-driver. If the passengers also need personal accident protection, you will have to include an add-on cover that provides you this coverage.

    Car Insurance Guide Page

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    GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

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