All those who hold a car insurance need to pay a fixed premium towards the plan. Explained below is a simple way to calculate your insurance premium.
Getting a car today may be a symbol of status, but the necessity of getting a car insurance still stands as one of the vital tasks. According to the Indian law, a car insurance is mandatory for all those who own cars. Other than the legal compulsion, the insurance also ensures safety towards you and your vehicle. You can use online car insurance premium calculator provided by car insurance companies or use a simple formula to calculate your insurance premium.
How to Calculate Car Insurance Premium online:
Car insurance calculator is a valuable tool that helps an individual to calculate the car insurance premium and also compare the prices of other premiums. The requirements for the insurance varies between customers and comparing the insurance premiums help an individual to get the policy they need.
On the basis of the information provided by the customer, a car insurance premium calculator can calculate the premium amount for the vehicle that is insured. One needs to provide all the details required for the calculation like car details, date of registration, start date of the policy and other coverage details.
The premium rates for used cars and brand new cars are also different for different insurance companies.
Calculate Premium for Used Cars - To know the premium quotes for used cars, one needs to give the following details: registration number, car type, details of change in ownership, fuel type and any previous year claim reports.
Calculate Premium for New Cars - Details required to calculate the premium for brand new car are: vehicle manufacturer's name, state where the car is registered, year of which the car is manufactured, vehicle model and also other personal details of the insured.
You can also calculate your car insurance premium with a simple formula:
Premium = Own damage premium – (No claim bonus + discounts) + Liability Premium as fixed by the IRDAI + Cost of Add-ons.
The following factors determine the premium value of the insured car:
Age of the Insured - Those individuals who are below the age of 25 and above 18 are considered to be more prone to accidents. So, the insurance premium for this age group is higher than those who are older.
Car Model and Variant - High end cars like Audi or Mercedes have a high insurance premium as compared to cars like Alto or Santro. Similarly, SUVs are insured at a higher price than hatchback or family cars.
City where you need the Insurance – If the city is a metro city and has a high traffic density, then the car insurance premium will be slightly higher than cities which have low density of traffic.
Fuel type - Vehicles that have CNG fitted inside have a higher premium than the cars that run on petrol or diesel.
Year of Manufacture - Older cars have a low Insured Declared Value (IDV) which makes the premium amount lesser.
Discounts - Few professionals get an additional discount on the premium, these professionals can be doctors, Government employees, defence personnel.
No Claim Bonus (NCB) - For every claim free year, the policy holder gets a cumulative discount which varies from 10% to 50%. NCB can be transferred to another policy for the same car or different car.
Wrapping Up
Other than these factors, a policy with a comprehensive coverage will have a higher premium cost. Although if a person had bought an insurance policy for their car, he/she needs to renew the policy to enjoy the benefits. Every policy comes with a predetermined expiry period after which the policy needs to be renewed. You can also calculate your car insurance premium online with the help of the car insurance calculator.