Impact of Cubic Capacity on Car Insurance Premiums
There are several factors that affect car insurance premiums. One of the major ones is the cubic capacity (CC).
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What is Cubic Capacity (CC) of a Car?
The Cubic Capacity (CC) is the engine size of the vehicle, i.e., the volume of the engine's cylinders, measured in cubic centimetres (cc). It indicates how much fuel and air the engine can consume and convert into power. The higher the CC, the more powerful & larger its engine, which can produce more power and torque.
How Does Cubic Capacity Matter in Car Insurance?
The cubic capacity is an essential factor in determining the car insurance premium, most particularly for the third-party insurance policy. This is due to:
- Linked to Power & Speed: Vehicles with higher CC are more powerful and capable of reaching higher speeds, which results in higher insurance prices.
- More Risks: Insurers perceive higher-powered vehicles to be at a greater risk of accidents and higher claims due to potential damages and repair costs.
- Costly Repairs & Part Replacement: Since larger engines and their components are costlier to repair or replace, insurance claim payouts are higher.
How Does Engine CC Impact Car Insurance?
The CC has a direct impact on the car insurance premiums. This is for both third party and comprehensive plans. Let’s know how it matters:
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Impact of CC on Third Party Insurance Premiums
The Insurance Regulatory and Development Authority of India (IRDAI) sets the premium prices for third party insurance for all vehicles. The amount is entirely based on the vehicle's cubic capacity and is the same across all insurers.
Have a look at the table showcasing third party liability premiums for a conventional vehicle based on the engine capacity:
| Engine Cubic Capacity (CC) |
1 Year Third-Party Car Insurance Premium |
3 Year Third-Party Car Insurance Premium |
| Less than 1000 cc |
2,094 |
Rs. 6,521 |
| 1000 cc – 1500 cc |
3,416 |
Rs. 10,640 |
| Above 1500 cc |
7,897 |
Rs. 24,596 |
On the other hand, in case of electric car insurance, the third party insurance prices are as follows:
| Battery Capacity |
1-Year Electric Car Insurance Premium |
3-Year Electric Car Insurance Premium |
| Less than 30 kW |
1,780 |
Rs. 5,543 |
| 30 – 65 kW |
2,904 |
Rs. 9,044 |
| More than 65 kW |
6,712 |
Rs. 20,907 |
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Impact of Cubic Capacity on Comprehensive Car Insurance Premium
While third party insurance premium rates are directly linked to engine CC and are decided by IRDAI, premiums for comprehensive car insurance are determined based on the following factors.
- Vehicle's Insured Declared Value (IDV): IDV is the current market value of the insured four-wheeler. This is the maximum amount the insurer will disburse to the policyholder in the event of vehicle theft or total loss, which is when the damage is beyond repair.
- Age of the Vehicle: Older cars generally have lower IDVs due to depreciation. Thus, they have lower insurance premiums.
- Area of Car Registration: If you live in an area with higher traffic density and accident rates, the insurance premium rates will be higher.
- Claim History: If you have a good driving record and do not raise any claims, insurers award you with the No Claim Bonus (NCB). NCB in car insurance is the discount you get on your policy premium at the time of renewal.
- Add-ons: Opting for additional covers (like engine protection or zero depreciation) will increase the premium.
How to Reduce Car Insurance Premium for a Car with a High Cubic Capacity?
If you have a car with a high cubic capacity, you can lower your car insurance premium amount by:
- Installing anti-theft devices (ARAI-certified)
- Opting for a higher voluntary deductible
- Availing of NCB benefits by not raising any claim.
- Buying or renewing car insurance online
- Selecting only necessary add-ons
In Brief,
Although a higher cubic capacity of a car means higher premiums, other factors like the car's design, safety features, and the insurer's risk assessment also influence the final premium amount. Thus, while choosing car insurance, carefully review your requirements to get the right coverage at the right price.
