There are many factors on which the price of a car insurance policy depends. One such factor is the geographical location of the car. Insurance companies charge a premium based on the region where the car is being used. Four wheeler insurance premiums are different in different regions of India.
For example, two people living in Mumbai and Lucknow respectively will have to pay different insurance premiums even if they purchase the same four wheeler insurance plan from the same insurer. The main reason behind this difference is the city of car registration which is Mumbai for one and Lucknow for the other one.
The four-wheeler insurance premium in a city that has more traffic and is more prone to accidents & burglary will be high as compared to a city that has less traffic. This is because the liability of the insurer will increase in a traffic-prone city where the possibility of vehicle damage or loss will be more. Thus, they will charge a higher car insurance price at such places and vice versa.
The IRDAI or the Insurance Regulatory and Development Authority of India has divided India into two zones, namely Zone A and Zone B. A four-wheeler insurance premium is estimated for a region based on these zones.
While Zone A includes tier A cities like Mumbai, New Delhi, Kolkata, Bengaluru, Chennai, Hyderabad, Pune and Ahmedabad, Zone B includes the rest of India.
Simply put, motor insurance premiums for cars registered in different zones will be different.
While calculating motor insurance rates for different zones, insurers consider two major factors. First, the age of the car and second, the engine's cubic capacity.
Given below is a table that shows the percentage of IDV (Insured Declared Value) taken into consideration to calculate the premium of Zone A and Zone B based on these factors. For the unversed, IDV is the current market value of a particular vehicle that a policyholder receives in case of a total loss at the time of claim settlement. These motor insurance rates have been set by the IRDAI.
The vehicles registered in Zone A are more prone to accidents and theft as these cities are more crowded and have heavy traffic when compared to cities in Zone B. Therefore, the four-wheeler insurance price in these cities is high due to the increased liability of the insurer.
The car insurance premium in Zone A is calculated as follows:
Age of the Car | Cars less than 1000cc | Cars between 1000cc to 1500 cc | Cars more than 1500cc |
Below 5 years | 3.127% of the IDV | 3.283% of the IDV | 3.440% of the IDV |
5-10 years | 3.283% of the IDV | 3.447% of the IDV | 3.612% of the IDV |
Above 10 years | 3.362% of the IDV | 3.529% of the IDV | 3.698% of the IDV |
The cities that come under Zone B are less prone to road accidents and theft as these cities are less crowded as compared to cities in Zone A. Therefore, the comprehensive insurance premium in this zone is less.
The motor insurance rates in Zone B are calculated as follows:
Age of the Car | Cars less than 1000cc | Cars between 1000cc to 1500 cc | Cars more than 1500cc |
Below 5 years | 3.039% of IDV | 3.191% of IDV | 3.343% of IDV |
5-10 years | 3.191% of IDV | 3.351% of IDV | 3.510% of IDV |
Above 10 years | 3.267% of IDV | 3.430% of IDV | 3.596% of IDV |
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 insurance prices vary as per the region where the car will ply. So the next time you are confused about a change in your car insurance premium, make sure to consider the region of your car registration. You can also compare third party insurance as well as comprehensive insurance rates based on your region for your four-wheeler on Policybazaar.com.
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