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

How Car Insurance Calculator Gets You Best Coverage

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A car insurance calculator is an online facility that enables you to get quotes on car insurance from multiple insurance companies in India. When you are looking to buy car insurance, the first thing to do would be to get familiarised with the different types of coverage available in the market. Once this is done, you should ideally compare insurance plans between providers to narrow down on the most suitable cover for your specific insurance needs.

Calculation Of Premium:

Car Insurance Calculator

The premium for car insurance is calculated based on several factors:

  • The Insured Declared Value (IDV) of the car
  • The cubic capacity of the vehicle’s engine
  • The year of manufacture of the car
  • The area of registration of the vehicle
  • The No Claim Bonus (NCB) accrued under the policy

When a brand new vehicle is driven out of a showroom, its value will start depreciating. Over a period of time, the depreciation will increase bringing down its IDV. In other words, an 10-year old car will have a much lower IDV than a brand new vehicle of the same make and model.

Although the premium for car insurance depends on the IDV of the vehicle itself, there are several other factors that come into play when calculating this value. So, we cannot conclude that it will be more expensive to insure new cars when compared to old ones.

Car insurance premium is calculated based on the formula given below:

Final quote = Own-damage premium + Third-party liability premium + premium for add-on covers - NCB and other discounts

The car insurance calculator available at neutral financial websites uses this generic formula that gives you a premium quote closest to the amount you will be paying when you buy a policy from a specific insurer.

Third-Party Liability Premium Is Fixed:

The Insurance Regulatory and Development Authority of India (IRDAI) decides the premium for third-party liability coverage under motor insurance on an annual basis. The values for the financial year 2017-18 are as mentioned below:

Private car engine capacity Premium from 1 April 2017
Below 1,000 cc Rs.2,055
More than 1,000 cc but less than 1,500 cc Rs.2,863
More than 1,500 cc Rs.7,890

Own-Damage Premium - What It Encompasses:

The own-damage premium in car insurance is based on the IDV of the vehicle that is, in turn, dependent on the age and depreciation of the car. Each insurer would have predefined guidelines on calculating this value.

Listed below are the key factors that affect your own-damage premium:

  1. The type of vehicle - The make and model of the car has a bearing on the premium quoted. For instance, high-end cars are more risky to insure as they are more prone to theft and it will be more expensive to repair damages on them. Hence, owners of these cars will have to bear higher premiums.
  2. Modifications to the vehicle - If you have made any alterations to the car it is important that you inform the insurance company of the same. Modifications to the vehicle can increase or decrease the risk to the insurer; so such changes will have to be reviewed by the insurance provider. There may be subsequent alterations in the premium as well. In case you fail to inform the insurer, they may not honour your next claim and void the coverage altogether!
  3. The type of fuel used in the vehicle - The fuel type used in the car affects its insurance premium. So pay close attention to this when you purchase a car.
  4. Coverage chosen - If you have taken limited insurance coverage your premium will be low. However, opting for a comprehensive car insurance policy with add-on covers will bring up the premium. So, pick the insurance coverage carefully by assessing your needs in detail.
  5. Insured Declared Value - The depreciation on every vehicle is fixed based on industry guidelines, as shown below:
Age of the car Percentage depreciation
Less than 6 months 5%
Between 6 months and 1 year 15%
Between 1 year and 2 years 20%
Between 2 years and 3 years 30%
Between 3 years and 4 years 40%
Between 4 years and 5 years 50%
Above 5 years This is calculated based on a mutual agreement between the insurer and the policyholder

The IDV of the vehicle is determined by the rate of depreciation mentioned above. The vehicle’s condition is also taken into account for the same. The assessment or survey is done by insurance surveyors or dealers.

  1. Discounts offered by the insurer - No Claim Bonus is a benefit offered to a policyholder who does not raise any claims during the policy term. This is like a reward for being a good driver. The NCB can translate into an irresistible discount of up to 50% on the renewal premium! So, it is recommended to preserve the NCB by not raising claims for small damages. The rate at which a car owner earns NCB is as detailed below:
Claim-free years NCB, as percentage of own-damage premium
1 year 20%
2 years 25%
3 years 35%
4 years 45%
5 years 50%

Another noteworthy discount is the premium reduction you are liable to receive by opting for a voluntary excess. This deductible is the amount you agree to pay upfront at the time of a car insurance claim. Although this brings down your renewal premium by a significant amount, you should be careful to not overstate this value, as you may have difficulty honouring the agreed payment at the time of a claim.

Insurance companies also give discounts to customers who have valid memberships in automobile associations across India. Age-based discounts, bundling discounts, and discounts for anti-theft device installation are other deductions offered on premium.

  1. Area of registration - If you stay in a locality where theft is common, you will have to pay higher premiums. Even parking your vehicle in a dangerous zone may jeopardise your eligibility for insurance coverage. Also, staying in an accident-prone area will attract higher car insurance premium.
  2. Customer demographics - Other factors that affect the premium are demographics such as the marital status, occupation, and gender of the customer.

Why Is It Important To Use A Car Insurance Premium Calculator?

As is the case with all financial products, it is very important to do a good amount of research before buying a car insurance policy. Listed below are some advantages of availing the services of this tool:

  1. It helps you make a better decision as far as insurance purchase is concerned. You will also have good knowledge of the coverage offered by different insurers and the corresponding costs.
  2. The entire policy comparison process is simplified to a great extent.
  3. You need not furnish any paperwork for policy comparison; hence, it is hassle-free.
  4. You can get an overall view of the available insurance plans in the market.
  5. Some websites enable you to go one step further and buy car insurance instantly with limited paperwork. You may also get attractive premium discounts for buying insurance online.

What Information Needs To Be Updated For Car Insurance Premium Calculation?

The following details are usually required to get quotes through the car insurance premium calculator:

  • Make and model of the car
  • State of registration and date
  • Year of manufacture of the car
  • Type of vehicle insurance, i.e., private or commercial

If you are buying insurance for a used car, you will have to update the details of the existing car insurance policy, details of previous ownership, and claim history. It is important that you furnish accurate information in the calculator facility; else you may not receive the best deals out there. Apart from these, you will also have to update some personal details such as your age, name, and profession.

What Is Car Insurance Renewal Premium Calculator?

The car insurance premium calculator facility can also be used at the time of policy renewal. In fact, it is highly encouraged that you look around for better deals in the market at the time of policy renewal. You can use the car insurance renewal premium calculator facility and get an idea of the coverage offered by different insurance companies and the corresponding costs.

However when you are looking to renew your policy, the premium is not the only thing that you should consider. It is important to understand the claim settlement history of the insurer and the efficiency of its customer service department.

You should also review your updated insurance needs and decide on the coverage you actually require at the time of renewal. During this exercise you may find out that a limited insurance cover would suffice for you for the next year. This way you can save on premium by cutting down on the coverage without actually having to shift insurers.

If you are planning to buy/renew auto insurance anytime soon, the car insurance calculator facility is an inevitable part of your purchase journey. You would be aware that this facility is offered without any additional charge at neutral financial websites. So it is imperative that you familiarise yourself with this tool and make a judicious purchase.

Car Insurance Reviews

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  • Tata AIG Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    It has been a good insurance policy and the premium has been paying annually. The premium amount has been nominal and the payment method has been easy. I had not yet made any claims so far and there has been cashless garages available as well....
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • Universal Sompo Car Insurance
    " Good protection for four wheeler"
    0.5 4.0/5 "Great!"
    All policies with Unviersal sompo, whenever I call they respond well on the toll free helpline. The policy covers fully my car compared to other insurer, the beginning it was zero depreciation plan, they gave me the insured declared value.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • L and T Car Insurance
    "Its Good"
    0.5 4.0/5 "Great!"
    The dealer gave me L & T general insurance policy for my car the premium amount is nominal for the tenure of one year, I have old Tokyo Innova, hence I took comprehensive and third party cover, they do have road side assistance and 24 hours services on time.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 14, 2018
  • ICICI Lombard Car Insurance
    "Good protection for four wheeler"
    0.5 5.0/5 "Blown Away!"
    From ICICI lombard I have taken car insurance for Hyundai I20, first time when I paid the around Rs. 25,000 when it was new car, now recently I paid is around Rs. 17,000 now its been 2.5 years old. The plan is called zero depreciation, with road side assistance, 24 hours services.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 14, 2018
  • Bajaj Allianz Car Insurance
    "Low premium with better benefits"
    0.5 5.0/5 "Blown Away!"
    One more policy taken for my another car its Maruthi dezire I paid the premium around Rs. 4000 its a old car, around 6 to 7 years, I have comprehensive plan its not zero depreciation plan. The customer service is good the premium is low and the max cover is nice.
    Was this review helpful? 0
    , new delhi
    Reviewed on Dec 13, 2018
  • Bajaj Allianz Car Insurance
    "Low premium with better benefits"
    0.5 5.0/5 "Blown Away!"
    My both the polices are insured with Bajaj Allianz, I have taken one policy for my Maruthi Ciaz car, I paid the premium was around Rs. 8000, I have taken the comprehensive it covers for the loss, damage, other natural disaster, hence I am fine with them.
    Was this review helpful? 0
    , new delhi
    Reviewed on Dec 13, 2018
  • Tata AIG Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I hold a car insurance with TATA AIG general insurance from last 10 months, a premium of Rs 16000 has to be paid for this insurance policy. There was no claim experience so far with this insurance and this policy has full coverage with 0% depreciation.
    Was this review helpful? 1
    , bangalore
    Reviewed on Dec 11, 2018
  • Tata AIG Car Insurance
    "Complete protection with Tata Aig"
    0.5 5.0/5 "Blown Away!"
    I approached Tata Aig through their agent, he have taken initiative to generate the policy on time, I have received the policy document on time, the premium amt around Rs. 11k for one year, I have road side assistance with engine protection, tier cover with best insured value.
    Was this review helpful? 0
    , keonjhar
    Reviewed on Dec 10, 2018
  • Royal Sundaram Car Insurance
    "Good Product"
    0.5 4.0/5 "Great!"
    For my Maruthi car I took Royal sundaram general insurance through dealer I have approached the premium is reasonable, I don't think its a comprehensive plan. Once I had claim I met with the accident, there was a car damage, they gave 70% of claim, remaining I paid from my end.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 07, 2018
  • Reliance General Car Insurance
    "GOOD"
    0.5 5.0/5 "Blown Away!"
    RELIANCE GENERAL INSURANCE is the insurer where i have taken my car insurance and the premium i paid which is nominal added on that the IDV value is also sufficient with this policy. The policy coverage is for bumper to bumper for this policy.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 07, 2018
  • SBI General Car Insurance
    "GOOD"
    0.5 5.0/5 "Blown Away!"
    I had a claim of 44k with the SBI GENERAL INSURANCE where i have taken the card insurance and the claim is of reimbursement and i got within the one day. The premium is nominal and the IDV is nominal. The coverage is for bumper to bumper. The process is good with this policy.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 07, 2018
  • ICICI Lombard Car Insurance
    "Good Protection for four wheeler"
    0.5 4.0/5 "Great!"
    The car policy with ICICI lombard is good and they are economical on the cost wise, I took policy for one year I took 100% its zero depreciation. They gave me best insured value based on the age of vehicle, they have ncb features and they many service centers too.
    Was this review helpful? 0
    , gurgaon
    Reviewed on Dec 05, 2018
  • Bajaj Allianz Car Insurance
    "Good claim process with fast service"
    0.5 4.0/5 "Great!"
    The premium amt is good in Bajaj Allianz and economical too, I paid Rs. 25k for one year. I have Hyundai I ton card its 3 years old, they gave me best insured declared amount, I got the papers on time, my claim exp is good, car got damaged and replaced and gave it on time, even they have lined with many service centers.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 05, 2018
  • ICICI Lombard Car Insurance
    "Quick policy"
    0.5 5.0/5 "Blown Away!"
    I have been renewing the policy for 4 years with ICICI Lombard. The policy was given by dealer when i purchase the policy and i'm continuing the policy without any reason. The claim experience was fine. I have got the coverage amount of Rs. 9 lakhs and i have got the claim amount of RS. 40000. This policy covered with bumper to bumper facility. I have got the claim within 5 days.
    Was this review helpful? 0
    , chennai
    Reviewed on Dec 05, 2018
  • Universal Sompo Car Insurance
    "Good Car Insurance policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance policy was taken 2 years ago with Universal Sompo. I have been renewing the policy with the same company. I have paid the premium amount of Rs. 4000. This policy has been covered for 100%. They have given me a car value of Rs. 1.90 lakhs.They have offered me a facilities of road side assistance and bumper to bumper. I have no claim experience so far.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Dec 03, 2018
  • Bajaj Allianz Car Insurance
    "Its Good"
    0.5 4.0/5 "Great!"
    Cost of the car policy is good in Bajaj Allianz. I have Maruthi card they best insured value based on the age. I don't have any claim experience. The insurance company gave me Rs. 2.5 lakhs for one year, third party cover and personal accidental cover is good.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 03, 2018
  • New India Car Insurance
    "Good Experience"
    0.5 5.0/5 "Blown Away!"
    In 10 years of experience I didn't face any claim. I have wagon R, the premium cost was economical, I paid around Rs. 5000 for one year, they gave me the comprehensive 100% protection plan, they got tie up with the dealer and they do have ncb features.
    Was this review helpful? 2
    , mumbai
    Reviewed on Dec 03, 2018
  • United India Car Insurance
    "Good car insurance policy"
    0.5 5.0/5 "Blown Away!"
    Since its a new car, they have given me a a zero depreciation policy. The dealer has recommended me about this car insurance policy when i purchase my car. I have paid the premium amount of Rs. 28000. They have not given me a road side assistance facility but bumper to bumper facility is available. More garages are available in my location.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 03, 2018
  • ICICI Lombard Car Insurance
    "Better"
    0.5 4.5/5 "Excellent!"
    My car insurance was taken with ICICI Lombard and it was offered by the showroom. They are giving zero depreciation and don't know about the other offers. The premium is included in the car price. The customer service is good. They have sent the insurance papers on time.
    Was this review helpful? 0
    , new delhi
    Reviewed on Dec 02, 2018
  • review Car Insurance
    "Value of money"
    0.5 4.0/5 "Great!"
    4 years back, i have bought my car insurance policy with Bharti Axa. Somebody suggested me about this car insurance policy. The premium amount is less comparatively less when i compared with other companies. I'm happy about the coverage value they have provided to me. I have not claimed anything in this policy.
    Was this review helpful? 0
    , new delhi
    Reviewed on Dec 02, 2018
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