A car insurance policy is a compulsory requirement for car owners. That is why every car owner buys a car insurance policy. However, many don’t know how the premium is calculated for the policy. A car insurance calculator helps in these cases. The calculator helps in calculating the premium of the car insurance policy based on the details of the car.
The components of car insurance premium
Though the calculator helps in calculating the premium of a car insurance policy, you should know the components of the premium. The premium of a car insurance policy is composed of three parts –
This premium is for the compulsory third party cover which is provided by the car insurance policy. This premium is fixed by the Insurance Regulatory and Development Authority of India (IRDAI) and is fixed for all insurers. The premium rate depends on the engine capacity of the car. IRDAI also reviews the premium rate every year and makes changes if required.
In the case of comprehensive car insurance policies, damages suffered by the car are also covered. This coverage is called own damage cover and a premium is charged for this cover. The premium rate depends on the Insured Declared Value (IDV) of the car and varies across different policies.
Many car insurance policies, both comprehensive and third party, offer an inbuilt personal accident cover. This cover pays a benefit in case of accidental death and total and permanent disablement. For this cover also, an additional premium is charged.
Thus, a car insurance policy’s premium is a combination of third party premium, own damage premium and premium for personal accident cover
How to calculate car insurance premium?
To calculate your car insurance premium, you should, first, determine the type of policy that you want to buy. If you are buying a third-party plan, you can simply check the premium listed by the Insurance Regulatory and Development Authority of India (IRDAI), add the GST to the premium @18% and you would get the premium.
For calculating the comprehensive car insurance premium, however, you would need various details. Moreover, the premium depends on the pricing strategies of different companies. You would, thus, have to use the car insurance premium calculator offered by companies or other online platforms like Turtlemint to find out the right premium amount.
How to use the car insurance calculator for calculating premium?
Using the car insurance price calculator is the easiest way of calculating your car insurance premium. The online car insurance calculator allows you to find the premiums instantly, and that too without errors. To use the car insurance price calculator, here are some simple steps –
Details required for calculating car insurance premium
For calculating the premium of a car insurance policy, some details are to be furnished in the calculator. These details are as follows –
The make, model and variant of the car determines the premium to be charged. Thus, the primary detail which is required for calculating the premium is the car details.
The year in which the car is registered is also required for calculating the Insured Declared Value (IDV). Calculation of the IDV is required for calculating the premium
If the car insurance policy is being renewed or a new policy is being affected for a used car, the existing insurance details of the car would be required.
The registration number is also required to identify the location where the policy would be bought. Premiums vary between different locations and so the location of the car is required to calculate the correct premium.
There are two types of car insurance plans, comprehensive and third party. Premium is different for the different types of plans. Hence, the type of policy required should also be provided in the calculator.
This is relevant if you are renewing an existing car insurance policy. Claim history determines whether there is any no claim bonus applicable or not. The discount is used to reduce the premium and is essential in premium calculation.
Calculating premiums for new and old cars
The online car insurance calculator helps you calculate the premiums for both new and old cars. However, some details are different when calculating these premiums. For new cars, for example, you have to provide the registration number. If you have not yet received the number, you can enter the registration location and proceed to calculate the premium. Moreover, for new cars, there would be no claim history or existing policy details to be mentioned.
In the case of old cars, you can use the car insurance calculator to find the renewal premium. Moreover, if you are using an insurance marketplace, like Turtlemint, you can also compare the premiums of different plans and port your policy to another insurer. However, at the time of renewal, you would have to provide the details of your claim history, existing insurance company and the applicable no claim bonus that you have earned. Moreover, you can add in or opt-out of car insurance add-ons at the time of renewal and find the applicable premium.
Even if you buy a second-hand car, you can use the online car insurance calculator to find the premium payable for the used car insurance plan.
Factors affecting the premium of car insurance policies
The premium of a car insurance policy depends on a lot of factors, many of which are used in the car insurance calculator too. The factors affecting the premium rate of car insurance plans are as follows –
As stated earlier too, the car’s make, model and variant affects the premium. This is because the car’s specifications determine the value of the car and the value of the car determines the premium charged.
Engine capacity determines the third party premium which is a component of premium calculation. Higher the engine capacity higher would be the car insurance premium.
A car insurance policy can be comprehensive or liability only. Comprehensive plans are more expensive than liability-only plans because they have their own damage premium component too.
If you modify the car and install safety devices, the risk of mishaps reduces. This risk lowers the probability of claims too. As such, cars with safety devices have lower premium rates because a premium discount is allowed for the installation of such devices.
The age of the car affects its Insured Declared Value (IDV). IDV, on the other hand, determines the premium. As the car ages, the IDV falls and so does the premium rate. So, premiums for older cars are cheaper than premiums for newer ones.
A car insurance policy allows various types of discounts. You get a discount if you install safety devices, don’t make a claim in the policy year, opt for voluntary excess, buy the policy online or become a member of a recognised automobile association. These discounts help in lowering the premium charged by the plan.
The location at which the car is registered also makes a difference in the car insurance premium. Premiums for metro cities are higher compared to premiums for non-metro ones.
A comprehensive car insurance policy allows optional add-ons which help in increasing the scope of coverage. Each add-on, however, requires the payment of an additional premium. Thus, if an add-on is selected in the policy, the premium increases.
How does the calculator help?
A car insurance calculator helps in estimating the premium payable for the car insurance plan. It also lists the available plans with their respective premium rates. This helps you in finding the best plan within your budget. Other advantages of the calculator include the following –
Calculating renewal car insurance premium
The car insurance renewal premium calculator helps you calculate the renewal policy for your car. You can use the car insurance renewal premium calculator of the insurer to find the renewal premium. You would have to provide the existing policy number and your registered mobile number, email ID or date of birth for authentication purposes. The details of the existing policy would be shown and you can make changes with respect to the add-ons that you want. Once you finalize the details upon renewal, the updated premium would be calculated. You just have to pay the premium to renew the policy instantly.
Insurance marketplaces, like Turtlemint, also offer you car insurance renewal premium calculators. You just have to enter in the details of your car, existing policy and claim history to find the renewal premium. You can check the premiums charged by different insurers, compare them and choose the best policy to renew car insurance.
How Turtlemint helps in calculating car insurance premium?
Turtlemint has a car insurance calculator which not only calculates the applicable premium it also lists the available plans for your car. You can, therefore, compare the available policies based on their benefits and premium rates before finalising a car insurance policy for your car. Turtlemint also provides one-to-one personalised services which help you in buying the best car insurance policy for your car.
The discount rate varies across different insurance policies. However, you can earn a discount of up to 50% in your car insurance premium using no claim discount and other available discounts.
Yes, if the car is modified, the value of the car increases or reduces. Any increase or decrease in the car’s value has a direct impact on the car insurance premium.
A comprehensive policy is costlier as it covers third party liability, own damage and personal accident cover. Thus, all components of the premium are included in a comprehensive policy which makes the premium costlier.
The personal accident cover, which is inbuilt in the policy, covers the owner or driver of the car. For covering passengers, a separate add-on should be taken.
Yes, the fuel type of the car also affects the premium rate. Diesel cars are more expensive than petrol variants and so the premiums for diesel cars are higher than premiums of petrol ones.
Yes, you can calculate the premium of a used car too using a car insurance calculator.