Does Car Insurance Premium Differ According to Regions in India?
Yes, car insurance premiums may vary across different regions in India. This is becauseRead more
IRDAI Zone-Wise Classification for Car Insurance
According to IRDAI, or the Insurance Regulatory and Development Authority of India, there are two zones, Zone A and Zone B, when it comes to vehicle registration. Car insurance premiums for vehicles registered in Zone A are higher compared to those registered in Zone B. Let's have a look:
| Parameters |
Zone A |
Zone B |
| RTO |
Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, Kolkata, Hyderabad, Ahmedabad |
All other locations |
| IDV |
~Rs. 5,41,491 |
~Rs. 5,41,491 |
| OD Premium (after discounts) |
Rs. 1,363 |
Rs. 864 |
| 3-year TP Premium (fixed) |
Rs. 10,640 |
Rs. 10,640 |
| Est. Total Premium (without add-on and GST) |
Rs. 12,003 |
Rs. 11,504 |
| Premium Difference |
- |
Rs. 500 - Rs. 600 lower |
*Note: The premium costs shown above are for the brand-new Tata Punch Smart MT variant as available on Policybazaar.com as of August, 2026. These prices are calculated as per the guidelines in the IRDAI motor insurance handbook and are subject to change. Always refer to the official website for the most recent prices.
Car Insurance Premium Calculation for Different Zones
Insurers calculate car insurance premiums for the own damage component across different zones in the following manner:
Zone A Own-Damage Premium (% of IDV)
| Car Age |
<1,000cc |
1,000-1,500cc |
>1,500cc |
| <5 years |
3.127% |
3.283% |
3.440% |
| 5-10 years |
3.283% |
3.447% |
3.612% |
| >10 years |
3.362% |
3.529% |
3.698% |
*Note: The data mentioned in the tables above is as per the Indian Motor Tariff 2002.
Zone B Own-Damage Premium (% of IDV)
| Car Age |
<1,000cc |
1,000-1,500cc |
>1,500cc |
| <5 years |
3.039% |
3.191% |
3.343% |
| 5-10 years |
3.191% |
3.351% |
3.510% |
| >10 years |
3.267% |
3.430% |
3.596% |
*Note: The data mentioned in the tables above is as per the Indian Motor Tariff 2002.
Why Do Car Insurance Premiums Vary by Region?
Since different regions have different risk levels, they may influence car insurance premiums. Let's understand how:
-
Accident Rates
Areas with heavy traffic are prone to accidents and minor collisions, which increase the potential risk for car insurance companies.
-
Theft Risk
The risk of vehicle theft is another factor that varies by location. Areas with higher theft rates present a greater likelihood of theft claims.
-
Repair Costs
Lastly, the cost of repairing a damaged car can also vary by region based on labour charges, spare-part availability and local service costs. So, higher repair costs increase the potential claim payouts.
Other Factors Affecting the Motor Insurance Premium
Apart from the geographical location of your vehicle, its IDV, car's age and engine displacement, some other factors also affect the motor insurance price. They include:
- Car Make and Model: The make and model of the car also affect the price of a four-wheeler insurance policy. For instance, the premium of a luxurious sedan will be more as compared to that of a hatchback car.
- Type of Coverage: The type of coverage you are planning to buy impacts your vehicle insurance rates. If you are purchasing third party insurance, your premium will be lower as compared to the comprehensive insurance that covers both third party liabilities and own damages.
- Add-on Covers: A final premium you pay towards your policyalso depends on add-ons in car insurance. These are optional covers (available at an additional premium) that help enhance your standard insurance coverage. The more add-ons you include in your standard car plan, the higher will be the premium.
- Safety Features: Your four-wheeler insurance premium will reduce if you have installed safety features, like an anti-theft device, in your car. In such cases, the chances of a claim reduce, thus reducing your car insurance price.
- Voluntary Deductibles: Opting for deductibles can also reduce the premium of your car policy. A voluntary deductible is an amount that you voluntarily agree to pay during claim settlement. The rest of the claim amount is paid by the insurance company. This lowers the liability of the insurer and thus, your motor policy premium will reduce if you opt for a voluntary deductible.
