Auto insurance is mandatory by law for all running vehicles in India. Auto or motor insurance provides financial protection in the case of a vehicular accident or third-party damage. Insurance companies in India offer various types of car insurances for all makes and models of cars in the market. Currently, all new cars come with a standard car insurance policy that has to be renewed after a year. There are 2 types of car insurances in India:
- Third party insurance: It covers damages incurred by a third party in a vehicular accident.
- Comprehensive insurance: It covers damages incurred by a third party and the damages for the insured vehicle.
Auto insurance providers have made it easier for customers to calculate the insurance premium using online premium calculators. Most insurance companies have car insurance calculators on their website. With this online premium calculator, you can get instant quotes for your car insurance. To renew your insurance policy, you will have to pay a premium amount every year.
Listed below are the factors that affect your car insurance premium:
- IDV (Insured Declared Value) of the vehicle: The IDV changes annually depending on the depreciation rate of the car.
- Cubic Capacity of the engine: The higher the Cubic Capacity of your car engine, the higher the premium for third-party insurance.
- No Claim Bonus (NCB): If you have not made any claims in the previous year, then you are entitled to a No Claim Bonus.
- Geographical zone: The car insurance premium in major cities which fall under Zone A is high as the accident-risk is also high whereas the premium is low in Zone B as the accident-risk is low.
- Year of manufacture: Age of the car is important to determine the insurance premium due to the depreciation rate as well as the entry of new car models in the market.
The formula for car insurance premium calculation is specified below:
Premium = Own Damage Premium – (No claim bonus + discounts) + Liability Premium as fixed by the IRDAI
For a used car, the insurance premium is determined on a mutual agreement between you and the insurance provider.
Online car insurance premium calculators are available on the insurance provider’s website and third-party websites like BankBazaar. How does it work? Here is a step-by-step process of how to calculate car insurance premium using the online premium calculator tool:
- Enter policyholder’s name, contact details, and address, followed by name of car manufacturer, car model number, manufacturing year, car sub-type, fuel type, and registration date.
- Click on the ‘calculate premium’ tab.
- Get an instant quote on how much premium you need to pay for your chosen car insurance policy.
Choosing the right insurance for your car depends on the cost of the premium, total coverage, and insurer’s reputability. With an online car insurance calculator, you can get the following benefits:
- You can forgo manual premium calculation which can be time consuming and misleading taking human error into account.
- In addition to saving time, your insurance premium calculation will be accurate as the tool gives you the option to include add-on coverage, NCB, etc.
- You can get an instant car insurance quote. Get multiple quotes from different insurers, so that you can choose the one that best suits your insurance needs.
Whether it is a new insurance or a renewal, you can get it done in few minutes with the handy online car insurance premium calculator.