Motor insurance policies are mandatory in India. If you own a car or a bike, you have to buy a valid motor insurance cover on the vehicle so that you can drive your car or bike without facing legal consequences. Since the policy is mandatory, you have to invest in a motor insurance plan for your vehicle.
There are two types of policies for your vehicle. One is the third party liability which covers any liability that you face if your vehicle damages third party property or harms someone physically. The other is the comprehensive package policy which covers both third party legal liability as well as the damages suffered by your vehicle itself. You can buy any suitable policy as per your coverage requirements but do you know the premiums are calculated?
Factors affecting motor insurance premiums
Premiums for a motor insurance policy depends on a lot of factors. These factors are mentioned below:
- Type of policy that you buy
The premiums for motor insurance policies depend on the type of policy that you choose. Third-party plans have lower premiums which depend on the cubic capacity of your vehicle’s engine. Comprehensive plans, on the other hand, have higher premiums because the scope of their coverage is wider.
- Age of the vehicle
The premium for newer vehicles is higher compared to older vehicles. This is because as the vehicle ages, its value decreases. Since the value is reduced, the premiums are low.
- Registration location
The place where your vehicle is registered also has a direct bearing on the motor insurance premium. In metropolitan cities, the probability of accidents is higher and so premiums in such places are higher.
- Make, model and variant (MMV)
The make, model and variant of the vehicle directly affect its premium. It is because the MMV determines the value of the vehicle. If the vehicle has a higher value the premiums would be higher and vice-versa.
- Term selected
Nowadays, vehicle insurance policies are also available for longer tenures which provide coverage for up to 5 years. If you choose a long term plan, you would have to pay the aggregate premium upfront. So, long term plans prove costlier than annual ones.
Comprehensive vehicle insurance plans allow optional coverage benefits called add-ons. You can choose any add-on that you want to increase the scope of your motor insurance cover. However, each add-on has an additional premium attached to it. So, if you choose add-ons, the premiums would increase.
- Fuel variant
Petrol vehicles are cheaper than diesel ones. That is why premiums for petrol vehicles are lower than those for diesel vehicles.
If you do modifications on your vehicle such that the value of the vehicle increases, such modifications impact the premium rate. Since the value has increased, the premiums are also increased. However, if you modify your vehicle to suit the usage of a disabled rider, you would be allowed a premium discount and your premiums would reduce.
- Premium discounts
Motor insurance policies have a range of premium discounts which help in lowering your premiums. If you can claim the available discounts, your premiums would reduce. Commonly available discounts in motor insurance plans are as follows –
- Discount for installing safety gadgets in the vehicle
- Discount for having the membership of a recognized automobile association
- Discount if you have not made a claim in the last policy years (called no claim bonus discount)
- Discount if you choose a voluntary deductible and opt to pay a part of the claim yourself
- Discount for buying long term policies, etc.
- Status of an existing policy
If you are renewing an existing motor insurance plan, its status would affect the renewal premium. If the existing policy has lapsed, the renewal premiums would be high. If, however, your existing policy is still in force, the renewal premium would not be increased.
Now you know the factors which determine the premium that you would be charged for your motor insurance policy. How about calculating the premium before buying or renewing the policy?
Motor insurance calculator
There are online motor insurance calculators which help you calculate the exact premium of your policy. These motor premium calculators calculate the premium based on the vehicle details that you enter. Using these calculators you can get an idea of the premium that you would have to pay for your motor insurance policy.
Where to find motor insurance premium calculator?
Motor insurance calculators are online tools and they are found on the website of the insurance company. Moreover, you can also visit the websites of online insurance brokers, like Turtlemint, which allow you to calculate the premiums of multiple motor insurance policies at once. By using Turtlemint’s motor insurance calculator you can calculate and also compare the motor insurance premium of leading companies. You can then choose a company which offers the best coverage benefits at the lowest premium rates and buy or renew your motor insurance plan.
How do motor insurance calculators work?
Motor insurance calculators work on the details that you enter into the calculator. You would have to provide the details of your vehicle based on which the premiums would be calculated. These details include the following:
- Registration number of the vehicle
- Make, model and variant
- Registration year
- Manufacturing year
- Place of registration
- Fuel type
- History of claims in an existing policy so that the no claim bonus can be determined
- Whether the existing policy has lapsed or not
- Type of policy that you want
- Add-ons selected if any
Once all the details are entered, the premium would be calculated and displayed.
How to use Turtlemint’s motor insurance calculator?
As mentioned earlier, Turtlemint’s motor insurance calculator helps you compare different motor insurance policies before buying. This allows you to choose the best plan at the lowest premium rates. To use Turtlemint’s motor insurance calculator, here are the steps –
- Visit the homepage of Turtlemint at www.turtlemint.com and choose your vehicle – Car or bike
- Enter the registration number of the vehicle and proceed
- Provide your vehicle’s make, model and variant
- Manufacturing year and fuel type would also be required
- Next, you should enter the details of your previous policy and state whether the policy is in force or has expired
- The type of the previous policy and the claim history is also to be recorded. If no claims have been made, choose the applicable no claim bonus. Also, state the previous insurer
- In the next step, you are asked to provide your contact information so that Turtlemint’s executive can call you and help you with buying the policy
- You would then be able to check and compare the available policies and choose the one which is best for your coverage needs
Top #4 Benefits of motor insurance calculator
A motor insurance premium calculator offers great help in calculating your motor insurance premiums even before you buy the policy. It provides the following benefits –
- You can estimate the premium outgo beforehand and assess the affordability of your motor insurance policy
- You can make a provision in your annual budget when you know exactly the premium that you would have to pay for buying or renewing motor insurance plans
- If you use the motor insurance calculator of online websites like Turtlemint, you would be able to compare the premium rates of different insurers and get the best deal
- If the calculated premium is high you can make changes in the policy and arrive at the most affordable rate
So, if you have to buy a new motor insurance policy or if your existing policy is up for renewal, use the motor insurance calculator to determine the premium, compare the available plans on their coverage benefits vis-à-vis premium rates and then buy or renew the plan.
Frequently Asked Questions:
- What is the cost of using motor insurance calculator?
There is absolutely no charge involved in using motor insurance calculators. You can use the calculator and calculate your premiums anytime without paying anything.
- Can I reduce my motor insurance premiums?
Yes, your motor insurance premiums can be reduced through the following ways –
- By using premium discounts wherever applicable
- By choosing only the required add-ons
- By renewing the policy on time
- By not making small claims and preserving the no claim bonus
- By comparing
- Does the premium remain the same every year under motor insurance plans?
No, the premium differs every year because the value of the vehicle decreases as it ages. Moreover, if there have been claims, the premiums would not be discounted. If you choose additional add-ons on renewing the policy, then also your premiums would increase. Thus, the premium is dynamic and changes every year.