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How your locality determines your auto insurance premium

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After the purchase of a new car, you would have protected it with an appropriate auto insurance plan for which you pst of your policy?

In India, the premium for a motor insurance policy is determined by a number of parameters, namely:

  • Cubic capacity of the vehicle
  • Insured Declared Value of the car - this is the maximum amount that you can claim on your auto insurance policy
  • Fuel type, i.e., LPG, diesel, or petrol
  • Utilisation of the car, i.e., whether the vehicle would be used for private or commercial purposes
  • City of registration
  • Occupation of the policyholder
  • Motor association membership
  • Installation of anti-theft devices

So how does the city where the car was registered impact the cost of its auto insurance?

The zone where the registration was done plays a pivotal role in identifying the value of premium. Other deciding factors such as the age of the vehicle and its cubic capacity are also influenced by zones where the registration took place.

India is divided into two such zones for the purpose of premium calculation. Zone A includes the 8 prominent cities of Chennai, Mumbai, Kolkata, Bangalore, Hyderabad, Pune, Ahmedabad, and New Delhi, while Zone B covers the rest. Zone A cities are locations that are more prone to risks arising from heavier traffic and greater population. These factors are seen to contribute towards higher instances of accidents and thefts. Hence, if your vehicle was registered in one of the cities falling under Zone A, you are liable to pay more for your auto insurance.

Car insurance premiums are also impacted by other parameters such as the age of the car and its cubic capacity. Cost of policies in the two zones based on these two factors are determined as follows:

Zone A

If we consider that the age of vehicles are constant, the varying cubic capacity determines the rate of premium.

  1. When the car is less than 5 years old,
    • For cubic capacity less than 1000cc, the premium is 3.127% of the car?s IDV.
    • For cubic capacity between 1000cc and 1500cc, the premium is 3.283% of the car?s IDV.
    • For cubic capacity more than 1500 cc, the premium is 3.440% of the car?s IDV.
  2. When the car is between 5 and 10 years of age,
    • For cubic capacity less than 1000cc, the premium is 3.283% of the car?s IDV.
    • For cubic capacity between 1000cc and 1500cc, the premium is 3.447% of the car?s IDV.
    • For cubic capacity more than 1500 cc, the premium is 3.612% of the car?s IDV.
  3. When the car is above 10 years of age,
    • For cubic capacity less than 1000cc, the premium is 3.362% of the car?s IDV.
    • For cubic capacity between 1000cc and 1500cc, the premium is 3.529% of the car?s IDV.
    • For cubic capacity more than 1500 cc, the premium is 3.698% of the car?s IDV.

Zone B

Car insurance policies in Zone B have lower rates of premium, as shown below:

  1. When the car is less than 5 years old,
    • For cubic capacity less than 1000cc, the premium is 3.039% of the car?s IDV.
    • For cubic capacity between 1000cc and 1500cc, the premium is 3.191% of the car?s IDV.
    • For cubic capacity more than 1500 cc, the premium is 3.343% of the car?s IDV.
  2. When the car is between 5 and 10 years of age,
    • For cubic capacity less than 1000cc, the premium is 3.191% of the car?s IDV.
    • For cubic capacity between 1000cc and 1500cc, the premium is 3.351% of the car?s IDV.
    • For cubic capacity more than 1500 cc, the premium is 3.510% of the car?s IDV.
  3. When the car is above 10 years of age,
    • For cubic capacity less than 1000cc, the premium is 3.267% of the car?s IDV.
    • For cubic capacity between 1000cc and 1500cc, the premium is 3.430% of the car?s IDV.
    • For cubic capacity more than 1500 cc, the premium is 3.596% of the car?s IDV.

Car insurance premium is greatly influenced by the area in which the vehicle is registered. Hence, the same vehicle will attract different premiums if it was registered on the same day in two different zones.

Summary

As mentioned above, the calculation of your car insurance premium is based on a number of factors. All car owners should ideally have an understanding of the elements that affect their auto insurance premiums, so that they can make well-judged decisions at the time of policy renewal.

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

Claim Reviews

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  • HDFC Ergo Car Insurance
    "Need to reduce the premium"
    0.5 4.5/5 "Excellent!"
    I had a car insurance with HDFC Ergo and I felt the premium is very high hence I changed my insurance provider. The customer service is very good. There was no claim experience. The policy period is one year. It is a zero dep policy which includes bumper to bumper and RSA. It is a first party insurance.
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    , hyderabad
    Reviewed on Jan 23, 2019
  • New India Car Insurance
    "Good"
    0.5 5.0/5 "Blown Away!"
    My car insurance was recently purchased with New India Assurance through online. When I logged into the online site it gives better option with multiple insurer and I felt New India Assurance is good with reasonable premium and better benefits. I have paid 13,500 rupees for a year. I got the insurance paper. The claim experience is very good.
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    , hyderabad
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  • ICICI Lombard Car Insurance
    "Good Policy."
    0.5 3.0/5 "Satisfactory"
    I have bought my car insurance with ICICI Lombard for last 5 years which I'm continuing for with the same company. The claim experience was better and when i applied for the same, they have given upto 80%. Its covered with bumper to bumper facility. They have given the claim in 1 week.
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    , bangalore
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  • Royal Sundaram Car Insurance
    "Good policy "
    0.5 5.0/5 "Blown Away!"
    My car insurance was purchased in the year 2014 with Royal Sundaram. My dealer has recommended me about this policy. I pay the premium amount of Rs. 14000 with the coverage value of Rs. 6.27 lakhs which covered with the bumper to bumper facility.
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    , ahmedabad
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    "Good Policy"
    0.5 3.0/5 "Satisfactory"
    I had taken this insurance policy a while back and the premium amount has been quite good and not too high. The payment method has been easy and there has not been any sort of charges, and the policy covers bumper to bumper. Their customer support has also been responsive and was helpful as well.
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    , mumbai
    Reviewed on Jan 22, 2019
  • ICICI Lombard Car Insurance
    "Its Good"
    0.5 4.0/5 "Great!"
    There was no claim experience for my Tata Tiago with ICICI Lombard. I have renewed the car policy at last june, I paid the amount around Rs. 10,600 because its around 1.5 year old vehicle. I took comprehensive plan which includes loss , damage, ICICI Lombard got tie up many showroom.
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    , new delhi
    Reviewed on Jan 21, 2019
  • ICICI Lombard Car Insurance
    "Best cover"
    0.5 4.0/5 "Great!"
    Very recently I took policy from Car insurance for my new Baleno car, it was done by ICICI bank, they deducted insurance fee from the loan. The loan department issued the policy copy on time. For first year its 100% coverage available its a bumper to bumper with ex showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 21, 2019
  • ICICI Lombard Car Insurance
    "Good Car Insurance policy"
    0.5 4.0/5 "Great!"
    I have selected the ICICI Lombard for my car since the dealer has given me this insurance. I have been paying the premium amount of Rs. 15000. This is not covered for the bumper to bumper facility. They have given me a IDV value of Rs, 3.10 lakhs. They are providing the good garage facility all over the city.
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    , bangalore
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  • United India Car Insurance
    "Yet to experience the policy"
    0.5 3.0/5 "Satisfactory"
    I have applied the claim for my car recently. I have given the car into the showroom and they have asked me to inform in the insurance company. When i visited other branch they have asked me to the home branch. They have given me a sufficient IDV value. Its covered with a bumper to bumper facility.
    Was this review helpful? 0
    , chennai
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  • ICICI Lombard Car Insurance
    "Reliable Policy"
    0.5 5.0/5 "Blown Away!"
    Purchased my car insurance through ICICI Lombard and They have given me a low premium since i have taken a loan from ICICI bank. They have given me a good IDV value. This is a bumper to bumper covered policy. They have given me a road side assistance, no claim bonus benefits.
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    , chennai
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  • National Insurance Car Insurance
    "Good Insurance"
    0.5 3.0/5 "Satisfactory"
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    , bhubaneshwar
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  • ICICI Lombard Car Insurance
    "Competitive price"
    0.5 5.0/5 "Blown Away!"
    I have taken a car insurance from ICICI Lombard and the service is really good. I spoke wtih the customer care once for the claim. The garage people taken care of the full settlement process. The premium amount is nominal. They have given me a best claim what they can offer according to their norms.
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    , bangalore
    Reviewed on Jan 21, 2019
  • Royal Sundaram Car Insurance
    "Economic offering and wide accessibility"
    0.5 5.0/5 "Blown Away!"
    Because it was good comparison between other companies hence i have chosen the Royal sundaram. The premium amount is reasonable. The IDV value is good. This a comprehensive policy which covers third party insurance. They have tie up with most of the garages. They have cashless facility in most of the places.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 21, 2019
  • Royal Sundaram Car Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I took my car insurance with Royal Sundaram. I never contacted the customer service. It is a default insurance from the showroom. The premium is high because I go for bumper to bumper offer, road side assistance, zeo dep. It is a first party insurance and no claim. The policy period is one year.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • SBI General Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    The showroom people has offered me a car insurance policy with SBI. I have made a premium amount of Rs. 22000. They have given me a coverage value of 100%. Total IDV value is 90% of the car value. I have no claim experience till now. The documentation process was done by showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • National Insurance Car Insurance
    "Smart protection with National"
    0.5 4.0/5 "Great!"
    The major factor to chose National Insurance because of the premium is economic, I took the policy for 3 years the IDV value remains the same for the whole tenure. The customer support is good on time they activated the policy. I have Tata Tiago , its around four months vehicle. Its zero depreciation comprehensive plan. I taken the policy through showroom.
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    , lucknow
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  • ICICI Lombard Car Insurance
    "Satisfied with the policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance is with ICICI Lombard. The customer services are good and I got the policy documents on time. The policy coverage is good and there are features of a road side assistance is there. The premium is economical too. Good overall.
    Was this review helpful? 0
    , bangalore
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  • ICICI Lombard Car Insurance
    "Need to reduce the premium"
    0.5 3.0/5 "Satisfactory"
    I had a car insurance from ICICI LOMBARD which was offered by the showroom at the time of purchasing the vehicle. I felt the insurance premium is very high compared to others. I got a reminder call from the customer service at the time of renewal. It has zero dep for one year.
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    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I took my car insurance from TATA AIG through online channel. They have given lesser premium with zero dep and it includes road side assistance. The customer service is very good. The policy period is one year. I have no claim experience. It is a first party insurance.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Satisfied policy"
    0.5 5.0/5 "Blown Away!"
    TATA AIG is the best company to take the car insurance. Since long time i have taken this insurance. The customer care people used to call me to renew the policy and they used to policy renewal letter. I will do payment through online. Several times i have claimed the policy and i have received very good response.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 18, 2019
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