How Much Does Your Car Insurance Cost Per Month in India?

In India, car insurance companies typically charge premiums on an annual basis. However, breaking the amount into a monthly figure can help you understand how much you are really spending and whether you have an optimum coverage. In this article, we will tell you how much your car insurance will cost per month and what factors will influence your premium rates so you can make a wise purchasing decision.Read more

Average Monthly Cost of Car Insurance in India

Here is the estimated monthly breakdown of car insurance costs in India:

• Third-Party Insurance Monthly Premium: Rs. 300 - Rs. 500*
• Comprehensive Car Insurance (Estimated Monthly Premium): Approximately Rs. 500 - Rs. 1,500+.

Estimated Annual Insurance Premium Cost by Car Type

The table below shows annual costs for comprehensive car insurance across different car categories:

Fixed Third Party Car Insurance Rates set by IRDAI

As per Indian motor laws, having third-party insurance is mandatory to drive legally on roads, and its premium is fixed based on the car's engine or battery capacity. Have a look:

• Below 1,000 cc: Rs. 2,094 per year.
• 1,000 cc - 1,500 cc: Rs. 3,416 per year.
• Above 1,500 cc: Rs. 7,897 per year.

Major Factors Affecting Car Insurance Cost

It's the sole responsibility of a car owner to renew his/her existing policy or buy new insurance online for his/her car. It's his/her choice to go with third-party insurance or a comprehensive one. However, the rates of insurance policy may vary based on many factors. So if you are planning to purchase an insurance policy for your car, you must be aware of the factors affecting its costs before buying. Take a look at these factors below:

1. Insured Declared Value

   IDV or Insured Declared Value is the current market value of the car. It is the maximum claim amount that your insurer will pay in case of accident, theft or damages to your car. The higher the IDV, the higher will be the insurance premium.

2. Type of Motor Insurance

   The cost of insurance also depends on the type of insurance coverage opted by the car owner. Since comprehensive car insurance offers wider coverage, its cost of insurance is higher.

3. Type & Age of the Vehicle

   The age and model of your vehicle are also considered while determining the cost of car insurance. For instance, if you are getting an expensive car insured, its cost of insurance will be higher. Similarly, the older the car is, the lesser will be its insurance premium.

4. Type of Engine Capacity

   Insurers also consider the capacity of a car's engine or battery (in case of EV) while determining premium prices. The higher the capacity, the more will be the insurance cost you will have to pay.

5. Location of the Car

   Another major factor is the geographical location where you live and have purchased your car insurance. For instance, if you are living in an urban area where traffic is high, you may have to pay a higher insurance premium.

Some other factors that affect four-wheeler insurance costs in India include installing security devices, No Claim Bonus, car modifications and discounts.

Car Insurance Cost Per Month in India

There is no fixed insurance cost per month for all four-wheelers owners in India. However, the insurance costs for a month in India is calculated based on the above-mentioned factors. Based on these factors, your insurance company will charge you a premium for your policy.

However, before buying car insurance, you can easily get the estimate of your monthly insurance cost using an online car insurance premium calculator. You can use this calculator to choose the best insurance policy for your car as per your requirements and budget.

How to Reduce Your Monthly Car Insurance Cost?

If you feel that your monthly cost of your car insurance is high, here's what you can do to reduce it:

• Drive responsibly and avoid making claims to earn a No Claim Bonus (NCB), which is the discount insurers offer on your premium.
• If you have an older car, avoid opting for unnecessary add-on covers with your policy.
• Compare car insurance online from multiple insurers every time you renew your policy.
• Install ARAI-approved anti-theft devices in your car.
• Select a higher voluntary deductible if you're a confident driver.
• Carefully select the IDV, do not over-insure or choose a low value.

Summing It Up

While car insurance premiums are typically paid on an annual basis, it is important to understand their monthly breakdown to make budgeting easier. Rather than just focusing on the lowest premium price, you should find the right balance between affordability and coverage. A well-chosen car insurance policy protects not just your car but also your finances.