How to Use Car Insurance Premium Calculator for your Benefit?

As per the government norms, it is compulsory to have valid vehicle insurance. However, a vehicle insurance plan should not be bought because of compulsion, instead one should purchase it to protect his/her car against damages and losses. To understand the importance of car insurance policy, one should understand the benefits it offers. In most of the car accidents, two parties are involved – one party who is hit and another party that hits.

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Above-mentioned prices are for a 7-year-old Maruti WAGON R AVANCE LXI (998 CC) registered in Gurgaon and 15 days before expiry of previous policy

Therefore, it is wise to opt for a comprehensive car insurance plan as it offers coverage against losses and damages incurred to both the parties that are involved in an accident. However, purchasing the right car insurance plan is not an easy task. One reason for unable to select the most suitable car insurance policy can be financial and technical jargon used in it. In such situations, they end up selecting car insurance that is cheapest and sounds useful and thus regrets their decision later when they make a claim. Therefore, it is suggested not to opt for an option just because it is cheaper and at this stage, the requirement of a premium calculator comes. 

The premium of a third-party car insurance policy is pre-defined by the Insurance Regulatory and Development Authority of India and hence it is common for all the insurance providers. On the other hand, the premium of a comprehensive car insurance policy depends on the inclusion of plans and hence is different for different insurance providers. Therefore, a car insurance premium calculator most of the time calculates the premium of the comprehensive car insurance policy.

What is Car Insurance Premium Calculator?

It is the most useful free tool available online. A premium calculator assists in determining the right quote or value of the premium that should be paid by an insured for his/her selected car insurance plan.

Benefits of Using Car Insurance Premium Calculator

With many car insurance policies and other options available online, one gets confused in selecting the best car insurance plan that suits his/her requirements. At that time, the car insurance premium calculator comes as a rescue. Mentioned below are some of the benefits of using car insurance premium calculator:

  • A car insurance calculator helps to take a well-informed decision.
  • Since calculating the premium manually as per the parameters of an insurance policy is a time taking process, using an online calculator saves a lot of time.
  • The insurance policy selection process is completely unbiased as there is no middlemen or agent is involved.
  • One can use a car insurance calculator anytime anywhere by eliminating the requirement of speaking to the agent.
  • A car insurance calculator as well highlights many factors apart from focusing on the price of an insurance plan.
  • Most of the car insurance premium calculators are very easy to use and provide the facility of changing different variables and find out the difference in the payable amount of premium.

How Does a Car Insurance Policy Premium Calculator Work?

Every insurer has its method of calculating the premium of the car insurance policy. However, mostly the inputs that one has to provide for calculating the premium of his/her car are mentioned below:

  • In case of used cars: For calculating the premium of used cars, most of the car insurance premium calculator asks for details like make and model of the car, fuel type, registration number, details of existing car insurance policy, and if the claims have been made on this insurance policy in the past. As soon as one enters all these details or other required details on the calculator, it calculates the amount of the premium that one has to pay for his/her car insurance policy.
  • In the case of a new car: The details that are required for calculating the premium of a new car are a little different. These details are – manufacturer’s name, manufacturing year, car’s model, registration state, etc. The details of the owner are also required. As per the information, the vehicle insurance calculator will calculate the number of premiums that one must pay for his/her insurance policy for an old car.

Why Is It Important to Use Car Insurance Premium Calculator?

It is always good to do the homework about a thing that one is going to purchase especially in the case of car insurance. However, if one asks what are the benefits of doing so or why is it important? Then here is the answer:

  • By using a car insurance premium calculator, one becomes well informed about the car insurance market and its players.
  • One becomes prepared with all the necessary documents.
  • This makes the complete process of insurance purchase convenient and easy.
  • For getting the best deal, one can compare the rates of different car insurance plans with it.
  • One gets a fair idea of various car insurance plans available in the market even in one go.

Factors that Influence the Car Insurance Premium

Mentioned below is the detailed list of the factors that influence the premium of car insurance policy:

  • Make and model of the car
  • Fuel type of car
  • Type of car transmission or car modification
  • The option of the coverage
  • The capacity of the engine
  • Age of the car or Insured Declared Value
  • Discounts
  • Add-on covers or riders
  • Demographic factors like marital status, age, gender
  • Location

Summing it Up!

There are two ways of purchasing a car insurance policy – through agents and online. If one goes for purchase through an agent, then he/she needs to wait for an agent to visit his/her home or some other place and explain different insurance policies. The agent as well suggests some of the suitable policies. The other way is to purchasing online wherein one login to the website of the insurance provider, sees some of the available plans, and selects the most suitable one. Of late, it is best to purchase an insurance policy online because there is no agent or middleman involved, which saves commission cost.

However, the question remains the same, which is, how to select the most suitable insurance plan that is affordable. The answer to the same is the car insurance premium calculator. A car insurance calculator helps one to choose the suitable policy as per his/her requirements. So, do not become mathematicians by trying to calculate the premium of a car insurance policy instead opt for a car insurance premium calculator.     

Written By: PolicyBazaar - Updated: 13 July 2021
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