Car Insurance Calculator

How to Reduce Car Insurance Premium?

Purchasing car insurance is mandatory in India. The policyholder pays the yearly premium amount to get the benefits of the insurance policy for a year. The policyholder can also purchase the insurance policy for multiple years for up to 3 years. The premium rates of the car insurance policy vary from the kind of cover the policyholder opts for and some other factors as well. To keep the premium rates of the insurance policy low, you can keep the following things in mind.

Online Purchase

Purchasing the insurance policy online is cost-effective. When a buyer opts for an online purchase, they get to compare different policies and purchase the one that suits their requirements and budget. Also, it reduces the agent’s fee.

Not Raising Small Claims

When the policyholder raises the claim for minor damages, they lose the benefit of the No Claim Bonus (NCB). It would be wiser and beneficial for the policyholder to not raise a claim for the minor damages and pay for its repair out of pocket.

No Claim Bonus Transfer

The policyholder should know his right and transfer the No claim bonus benefit after purchasing a new car and a new car insurance policy. When a policyholder hasn’t raised a claim in the previous year's makes that policyholder eligible for NCB benefit that is decided by the IRDAI.

Renew Policy on Time

When the policyholder does not renew the policy on time the insurer provides a grace period during which the policyholder can renew the policy. In case the policyholder does not renew the policy within the grace period, the insurer cancels the insurance policy.

Installing Anti-theft Device

If the policyholder has installed any anti-theft device in the car then the insurer will provide a 5% discount on the yearly premium rates. The discount on car insurance premiums is provided to those who install the anti-theft device that is certified by the Automotive Research Association of India (ARAI).

Try Not to Modify Your Car

Some of the car enthusiasts who have a thing for modifying their cars and make it look cooler than it is. They install new alloy wheels, woofers, headlamps, etc. This becomes one of the major reasons behind the increment of the premium rate of a car insurance policy.

Transportation Cost Is Saved

To reach the insurer’s office a person either goes by public transport or by their vehicle. Both convince costs a certain amount of money. This expenditure can be saved if the car owner chooses to purchase the policy online.

Factor that Determines Car Insurance Premium Value

Top Variables that play an indispensable role in deciding car insurance premium rate are:

• Age and Gender – Individual below 25 years of age are perceived by the insurance company to be more likely involved in accidents and hence individuals in the age bracket of 18 – 25 have to shell out a higher premium.
• Car Make, Model and Variant – For obvious reasons, high end cars like Audi and Bentley are insured at a higher price than budget car like Alto and Santro. On similar grounds, SUVs are insured at a higher premium than a family car.
• Place for which you Need the Insurance - Since the traffic density is higher in the urban areas, cars are insured at a slightly higher premium in the urban areas compared to the sub urban areas.
• Fuel Type – Compared to a plain petrol/diesel car, you’ll have to pay a higher premium for insuring a CNG fitted car.
• Year of Manufacture - The older your car, the lesser is its Insured Declared Value (IDV) and the lesser the IDV, the lesser is the premium.
• Discounts – Certain professionals such as defense personnel, doctors and govt. employees are entitled to get an additional discount on their premium.
• Voluntary Access - Voluntary access is the minimum amount that you declare to bear at the time of claim. The higher deductible you opt for, the lower will be your premium.
• Anti-theft Discount – You are entitled to get 2.5% off on the premium, if your car is fitted with an ARAI approved anti-theft device.
• No Claim Bonus – No Claim Bonus is offered to the insured for every claim free year. It is a cumulative discount and varies from 10% to 50%. NCB can be transferred to another car or policy.

Details Required for Calculating Insurance Premium for your Car 

One can use online car insurance premium calculator without any assistance in a simple and straightforward manner. Car insurance quotes from top vehicle insurance providers will be provided depending on the inputs provided.

Following details need to be filled in car insurance calculator online-

• Car Registration Number
• RTO
• Car Registration Year
• Car Variant
• Manufacturer
• Fuel type and so on

The only thing that one needs to be cautious is off is to provide accurate information and derive the cost of premium from top insurers. One can either select or reject it and make the payment upon satisfaction.

You can also use this basic formula to understand the car insurance premium calculation better.  It goes as follows-

Premium is equal to Own Damage Premium – (No claim bonus + additional discounts) + Cost of Additional covers+ third-party Premium as Fixed by the IRDAI

Below is the third party car insurance premium rates effect from June released by IRDA, 16 June 2019

How Do You Calculate the Car Insurance Premium for New & Old Cars?

The following information needs to be provided while calculating car insurance premium online for old and new cars with insurance calculator -

How to Calculate Insurance for New Car?

The new car insurance price depends on the type of plan that you are buying. If you opt for a comprehensive policy, the new car insurance cost will consist of two parts – third-party premium and own damage (OD) premium. The third-party premium for all cars is decided by the IRDA. However, the own damage premium is calculated with the help of the following formula:

OD Premium of a new car = Insured Declared Value (IDV) of the new car X insurer rate of premium + Add-on covers - Discount

Besides using the formula to calculate the new car insurance price, one can use a car insurance premium calculator to determine the premium of your new car.

Details required for insurance calculated for a new car:

• Car details and the name of the car manufacturer
• Make and model of the car
• Type of the car
• Date and the state of registration
• City & RTO
• Fuel type
• The year of manufacture

How to Calculate Insurance for Old & Used Cars?

• Type of the car
• Fuel type – CNG, Diesel or Petrol
• Claim history
• Depreciation value
• Details of the last policy

Car Insurance Premium Renewal

Customers who have already brought an insurance policy for their cars need to renew the policy at regular intervals to get all benefits. Each of the policy is designed with predetermined expiry dates, after crossing that particular date; customers need to get renewal for the insurance policy. One can easily renew the policy online.

Many buyers make premium rates the sole criteria of choosing a car insurance policy. However, this is not a right move. There are other features and benefits in a plan to look out for. If you are getting a better coverage at a slightly higher premium rate, you should prefer it over a lower coverage plan.