Car Insurance Premium Calculator

It may sound like a tedious job, but calculating your car insurance premium is very simple.

You begin with understanding what makes up your premium, and then use a few simple tips to adjust it.

What Forms A Car Insurance Premium?

 Before you calculate your premium, know the components of your car insurance premium. This can help you understand, calculate and compare.

Your car insurance premium is made up of 6 components:

Primary ComponentsSecondary Components
- Third-party cover
- Own-damage cover
- Discounts
- Personal Accident Cover for Owner Driver
- No claim bonus (NCB)
- Service tax

The primary components are important since they constitute a major portion of the premium amount.

Third-Party Cover

  • This type of insurance is mandatory in India for every car owner/driver.
  • This cover provides a financial protection in the case of any loss or damage caused to another person, property or vehicle because of your car.
  • The third-party premium rate depends on the engine’s cubic capacity of your car.
  • Such rates are fixed by the IRDAI, and are revised every year or so.

Own-Damage Cover

  • This is an optional, yet, a beneficial cover.
  • It mainly comes as part of a package policy or comprehensive insurance policy, in which the Third-party cover is included.
  • It protects you and your car against any loss or damage due to accidents, fire, theft, natural or man-made calamities.

The premium rate for such a cover is calculated as a percentage of the Insured Declared Value (IDV) of your car. The Insured Declared Value is the current market value of your car. It also refers to the sum assured to you by the insurer in case of total loss or damage to your car. The higher the IDV, the higher are the premiums.

You can easily calculate your premium online with the help of a car insurance premium calculator.

What Is A Car Insurance Premium Calculator?

  • A car insurance premium calculator is an online tool that helps you calculate your premium based on the information that you provide.
  • Most of the insurance companies have this calculator on their websites.
  • With this dynamic tool, you get to compare the quotes from different insurers.
  • Different people have different set of requirements. This tool helps you get the plan that best suits your needs.

Why Use A Car Insurance Premium Calculator?

Ease of ProcessThe initial comparison of policies makes the entire buying process simple, quick and easy.
Save MoneyYou compare different quotes and choose the plan that best suits your pocket.
Reduce Premium AmountWhen you use the calculator, you get to see how a change in any of your details changes the premium amount.

For example, you realise that a lower IDV could generate a lower premium. Having said that, declaring a low IDV could have an adverse effect on your claim amount.
Informed DecisionYou are not bothered or influenced by agents.
You can weigh every aspect yourself and select the optimum choice.

How To Use A Car Insurance Calculator?

To use a car insurance premium calculator, follow these three simple steps.

Step 1: Select Your Calculator

Most insurance companies have a calculator on their website. Go to any of these websites and click on premium calculator.

Step 2: Enter Your Vehicle Details

To begin, you must fill in the following details:

  • Car model name
  • Car model variant
  • The year of registration
  • The city of registration
  • Details of your previous policy

These details affect your premium, especially the last one that ascertains your claim history. Good drivers who avoid accidents and do not make a claim during a policy period, get a discount on their premium when they renew insurance their car insurance policy. This discount is known as a no-claim bonus. You could earn up to 50 percent discount as a no-claim bonus, for five continuous claim-free years.

Step 3: Check The Insured Declared Value (IDV)

You can either choose the IDV yourself or allow the insurer to do it, to get you the best deal.

You will see that the premium amount changes with a change in the IDV. The IDV is the current market value of your car. If you choose a lower IDV, you pay a lower premium. This is because IDV is the maximum amount that your insurer could pay you during a car insurance claim for total loss. The lower the IDV, the lower would be the claim. Thus, a lower premium amount.

So, when you calculate and compare premiums, ensure that you check the premiums offered for the same IDV. It should give you an idea about which car insurance policy is cheap, and which one is costly.

Step 4: Look At The Type Of Coverage

There are three basic types of policies – third-party, comprehensive, and zero depreciation.

A third-party liability policy is a basic policy. Opting for a third-party coverage reduces your premium.

A comprehensive policy costs more, since it offers a wider coverage. A few thousands more and you can get a bumper-to-bumper policy.thousands more and you can get a bumper-to-bumper policy.

So, when you calculate your premiums, check the rate for different types of policies.

For example, if you are calculating the premiums offered by companies A and B, ensure that you compare the premium rates for the same type of insurance—third-party, comprehensive or zero-depreciation. Otherwise, you’d be comparing apples with oranges.

Step 5: Decide The Add-On Covers You Need

Select the additional covers that you need. The most common ones are zero-depreciation, NCB protector and return to invoice. Other add-ons include consumable expense, accessory cover, etc.

Remember, the more the add-ons, the higher is your premium.

Say, if you choose the Road Assistance Cover, your premium may go up by 10 percent. If you choose add-ons like Accessories cover or Passenger cover, you have to provide further details. For example, you have to enter the coverage amount, if you choose a passenger cover.

So before looking at the premium amount, ensure you checked these details. You can also tweak these details if the premium is unaffordable.

Step 6: Tweak The Deductible Amount

  • Once you choose your policy, fill in the amount that you would like to pay as deductibles.
  • Deductible is a predetermined sum that you pay during every claim.
  • This is usually a small amount.
  • You can lower your premium by opting for a voluntary deductible

While calculating the premium, you realise that the premium amount changes with a change in the detail you provide. There are several other factors that affect your premium. Like:

  • Security features like anti-theft devices get you a discount on the premium.
  • The membership of Automobile Association of India (AAI), offers a discount on own-damage cover premium to its members.

Step 7: Last Stage

Clicking on the ‘Calculate Premium’ button is not the end of the story.

You can keep going back and forth. Change as many details as possible. The premium amount changes every time.

This way, after multiple permutations and combinations, you can find the right insurance policy quote—one that fits your budget and offers as many features as possible.

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