Factors Determining Car Insurance Premium Calculation
Vehicle Type: Your vehicle type majorly decides your premium. These factors include the Car Make Model, Motor Transmission type, Car Modification & Car's fuel type
Plan Type: Premium is also determined based on whether you have a Third-Party Car Insurance, a Comprehensive Car Insurance or Standalone Car Insurance.
Engine's Capacity: The car’s Cubic capacity also determines the premium for the Own Damage cover.
Car's IDV: The sum insured of a comprehensive car insurance policy is its current market value which is called Insured Declared Value (IDV). As your car grows older, the IDV decreases.
No Claim Bonus: NCB discount is availed during policy renewal for zero claims in the previous year. Other factors include Voluntary Deductible, AAI Membership Concessions & Installation of Anti-Theft Devices.
Geographical Location: Insurance providers also rate the premium according to the place where the insured car will be mostly driven. Urban cities have higher premium rates than rural locations.
Details Required for Calculating Used Car Insurance Premium
Current car insurance policy details
Previous car ownership details
Previous year claim history reports
All documents mentioned in new car insurance
How To Reduce Car Insurance Premium Price?
Here are some ways which can help you reduce your vehicle/car insurance premium:
1. Avoid Making Small Claims
The simplest way to lower your insurance premium is to earn No Claim Bonus (NCB) by not making any claim in a policy year. In order to accomplish this, you should avoid filing claims for minor damages. Instead, pay for these damages out of your own pocket. Also, you need to drive responsibly to avoid any accidents.
2. Purchase Car Insurance Online
Online policy purchase brings a lot of difference in comparison to buying a plan through offline mode. Making an online comparison of policy premium quotes can help a person to find a reasonable policy easily. Also, insurance companies offer policies at economical prices online due to the absence of any agent, etc.
3. Install Anti-Theft Devices in Car
Installation of anti-theft devices not only ensures security to your car from theft, etc., but can reduce the yearly insurance premium by around 5 percent. However, different insurers offer discounts only on anti-theft devices certified by the Automotive Research Association of India (ARAI).
4. Renew Your Policy On Time
With timely renewal of a car insurance policy, you can avoid a lapse in the plan which will ultimately save you from getting your car re-inspected. It will also permit you to get the policy at the previous rate thereby avoiding any hike in the premium amount.
5. NCB Transfer to the New Car
You should get the earned NCB transferred to your respective new car insurance plan. It is prudent to retain the NCB benefit with you as it helps you reduce your car insurance premium rate with the new car insurance policy.
It depends on a number of factors. Depending on the make of your car, the insurer, and the benefits offered, the cost of auto insurance could range from around Rs. 2,000 to well over Rs. 10,000 or more.
The premium for OD cover is calculated as a percentage of IDV as decided by the Indian Motor Tariff. Thus, formula to calculate OD premium amount is: Own Damage premium = IDV X [Premium Rate (decided by insurer)] + [Add-Ons (eg. bonus coverage)] – [Discount & benefits (no claim bonus, theft discount, etc.)]
Disclaimer - Above mentioned prices are for a 2 years old Maruti Wagon R, 1.2 VXI AMT OPT (1197 CC) registered in Mumbai & previous policy has expired.
Written By: Coverfox - Updated: September, 2022.
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