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Car Insurance Premium Calculator | Coverfox.com

The kind of vehicle you drive will majorly decide your premium that you will have to pay.

Car make model

Safer vehicle poses fewer risks for the driver.

Example: If you chose a car that is closed or covered with featured locks, there is a lower risk of theft. On the other hand, a premium car like a sports car would have a higher risk of theft along with speed driving. In short, choosing simpler cars can get you lower premium rates as compared to luxury cars.

Motor Transmission type/ Car Modification

Let’s imagine you have a car with a manual transmission from the time of purchase. Now, you are convinced that you want to go in for the automatic transmission at some point in time, you can easily do so. Or vice versa.

However, before beginning the procedure of modification, do check your comprehensive. Look out for add-on policy plans to know for sure if this transformation will be covered.

Car modifications do have an impact on your premium. Check with your insurance company as to which kind of modifications can affect your quotes.

Example: You might have installed a GPS device in your car or a music system. Its cost was not included in the showroom price of the car and it can increase the value of your car. Naturally, the premium amount will also increase for installing such fittings.

Car’s fuel type

Some may prefer the manner that diesel delivers its sustained performance over a period. Some may also take to the way the petrol variant offers more fuel economy.

The type of fuel you use and how much mileage it offers also affects the premium.

The choice should ultimately be your own.

2. Coverage Option

You may opt for

  • Third-Party Insurance (Covers only third-party liability)
  • Comprehensive Insurance (Covers you, your car, and third-party liability)

While premiums are fixed by the IRDA, insurers are free to charge the premium for a comprehensive policy as per their underwriting norms.

If you think that higher level of cover will cost you more premium, that’s not always true. The price you pay for every cover is worth checking, as some drivers feel they can get more out of less.

3. Engine Capacity

The premium for third party plans are fixed by IRDA taking into consideration the engine capacity of your car.

Now what’s cubic capacity?

The total power produced by your car engine is measured in terms of Cubic Capacity. Remember that the engine size influences your premium particularly the Third Party Insurance Cover.

These rates are revised each year by IRDA. From 1st April, 2016, the third-party insurance rates are:

CONDITION RELATING TO ENGINE CAPACITYAPPLICABLE PREMIUM RATE
Not exceeding 1000ccRs. 2,055
Above 1000cc but lower than 1500ccRs. 2,237
Exceeding 1500ccRs. 6,164

4. Insured Declared Value (IDV) or Age of Your Car

The sum insured under an OD car insurance policy reflects the value of the vehicle. This is what we call the car’s Insured Declared Value or IDV.

IDV is the value of the car that is determined based on the manufacturer’s present value and depreciation based on the vehicle’s age. Remember that greater the IDV, higher the premium and vice versa. You may think that decreasing the value of your IDV will give you lower premiums.

But, beware! Because with that you get a lower coverage than required. In case you make a claim and if the cost of damages are more than the IDV you receive, then you have to pay the rest from your pocket.

Getting an IDV that is close to the market value of your car is always the best bet. As your car grows older, the IDV decreases. Here is a schedule of depreciation for arriving at a car’s IDV.

Age of Vehicle% of Depreciation for calculating IDV
Up to 6 Months5%
6 Months to 1 Year15%
1 Year to 2 Years20%
2 Years to 3 Years30%
3 Years to 4 Years40%
4 Years to 5 Years50%

The IDV of old vehicles (that is, of above five years of age) is calculated by mutual agreement between insurer and the insured. Instead of depreciation, IDV is then arrived at by assessment of the vehicle’s condition. It’s carried out by the dealers or the insurance surveyors.

5. Discounts

No Claim Bonus

Don’t make a single claim and you are entitled to receive the No Claim Bonus or NCB discount at the time of renewal. You receive this as a reward for driving carefully and practicing road safety. Here is a table showing how NCB is calculated across the motor insurance industry on your insurance premium.

Claim Free YearBonus (%)
1 YEAR20%
2 Years25%
3 Years35%
4 Years45%
5 Years50%

Voluntary Excess

If you are confident of your driving skills, then choose a higher Voluntary Deductible amount. The deductible is an amount you need to pay before the insurer contributes the reimbursement of the claim.

This amount reduces your premium typically between Rs. 1,500 – Rs. 15,000 since the insurer is not going to pay this back to you. Your record may earn you a suitable discount on the deductible charged.

Make sure you choose a sensible Voluntary Deductible amount. At the time of claim, you should be able to pay it from your pocket.

Valid Membership Concessions

Some insurance companies also provide concessions. This is if you have a valid membership of a registered automobile agency. Membership of the Automobile Association of India, which is powered by IRDAI, secures you a concession on OD premium.

Installation of Anti-Theft Devices

Automative Research Association of India (ARAI) approved anti-theft devices are also recommended. You get 2.5% discount on premium by installing them!

6. Add-On Covers

Add-ons work as a security blanket in preventing you from burning a hole in your pocket at the time of claim. It hikes up the premium a little. But if used smartly, then it’s totally worth it.

Zero Depreciation add-on cover plan comes with a cost. However, it provides adequate coverage for eventualities.

The passenger cover is another add-on cover in which you may increase the sum insured and also provide for other passengers. Similarly, there are few other essential add-on covers that you can choose from.

7. Location

If you are living in an area or work in a zone that is prone to vandalism, you are likely to get higher premiums. Simply put, parking your car in a dangerous zone means higher chances of thefts or damage. Comparatively, individuals living in safer areas or residential neighbourhoods would benefit with lower premiums.

For example:

Delhi falls in the Zone A list of cities as prescribed by IRDA. This entails a higher amount of premium than that charged in Zone B cities. So don’t feel cheated if your friend living in Ranchi or Amritsar is paying a lower premium than you for the same car. Why does the area of car registration matters:

In some places, the premium is higher because of increased volume of traffic. This increases the chances of accidents while other cities fall in the Zone B category where premiums are lower.

8. Demographic

It’s true. Demographic factors do influence your car insurance calculation.

Age

A middle-aged driver would be less prone to minor accidents due to better vision and agile motor skills. Likewise, a young driver could be prone to rash driving. On the other hand, an older driver may have more accidents due to poor eyesight or slower motor skills.

Marital Status

Research shows that married people tend to have fewer accidents as compared to single individuals. In particular, men get lower premium rates after marriage.

Gender

Statistics reveal that teenage boys are more prone to accidents as compared to girls. On the other hand, middle-aged and older women have a higher accident record.


Category: Auto Insurance

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