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 –
- Third party premium
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.
- Own damage premium
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.
- The premium for personal accident cover
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.
Benefits of Car Insurance Calculator
Car insurance premium calculator is an online tool that allows you to get an estimate of the car insurance premium. On the basis of the details of the car such as make, model, variant, age and RC location, the calculator gives you a fair idea of the premium.
There are a lot of benefits of car insurance calculator, lets us take a look at them:
- It’s so simple to use
You need not sit with a pile of documents and apply different formulae to get to know your premium amount. Just enter a few basic details of your car, and check the price on your smartphone, laptop or computer.
- It’ll save you a lot of time
The process of calculating the premium will not be more than a few minutes. No matter where you are, in a few moments, you will get an estimate.
- Get a Clear Idea
With a calculator you can know how much would be the amount you would have to spend towards the premium policy. You can add or drop add-ons and see how it affects the final amount.
- Its Free
Another great benefit of using an insurance calculator is that it does not cost you at all. You can use it for free as many times as you wish.
- Customised to your requirements
The calculator will not give you a generic idea, but based on your specific details and insurance needs. You would also be shown the discount you can avail with the NCB that you have accumulated. You would thus be able to know the exact amount that you would be paying.
- Its transparent
There are no commissions, hidden costs and charges when you use the car insurance calculator. You can see the break-up and get the benefits of a transparent procedure.
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 –
- Go to the insurer’s website from where you want to buy a car insurance policy. Alternatively, you can visit an online marketplace, like Turtlemint, to calculate as well as compare the car insurance premiums of different companies.
- Provide the details of your car like the registration number, location, age, manufacturing year, make, model and variant, etc.
- Provide the claim history if you are renewing an existing policy
- Choose add-ons if you want to
- The final premium would be calculated and shown to you. You can also check the premium pre and post GST application.
How Do You Calculate Insurance Premium for Used Cars?
If you need to buy insurance for your old car, it is best suggested that you first make use of a car insurance premium calculator. This would help you get a fair estimate of the insurance premium that has to be paid. The process of calculating insurance premium for your old/ used car becomes quite easy with the online insurance calculator. A web portal such as Turtlemint can help you calculate the premium in just a few minutes. Follow these steps:
- Visit the website and go to Car Insurance. Click “Get Quotes/ Buy Car Insurance”
- Enter the Registration details. You may be asked to fill in your Personal Details
- You would then be asked to choose the kind of policy you wish-Third Party, Own-Damage or Comprehensive and the policy that covers the car currently/ previously
- Once you choose the NCB (if any) and the previous policy insurer you would see a number of quotes on your screen, which would also show your IDV as evaluated by different companies
- At this point you can choose the add-ons, if opting for Comprehensive or standalone Own-Damage Insurance
- Now, you will get a fair estimate of the insurance premium that you need to pay. You can then choose a policy that best suits your insurance needs and your budget and Click “Buy”
How Do You Calculate Insurance Premium for a New Car?
Calculating the insurance premium for a new car is a very simple and easy procedure that does not take too long. You can visit any insurance market plane online, and make use of a car insurance calculator in order to calculate the premium amount. If you have recently purchased a new car, getting it insured is mandatory by law. Though a third-party policy will be cheaper, it would not cover your own-damages, so it is highly advisable that for a new car, you prefer buying a comprehensive policy. Take a look at the steps that you need to follow:
- Log in to the website and click Car Insurance Quotes or Buy Car Insurance
- A few fields will now be presented for you to enter the car details such as make, model, variant etc. Your Personal Details such as name, contact number, email and date of birth would also be asked
- Then, you would have to select between:
- Third Party
- Own-Damage or
- Comprehensive Insurance
- With an Own-Damage or Comprehensive policy, you would have the option to enhance your coverage through add-ons
- Once you make the selections, you will be shown the car insurance policy premium by different companies. If you wish to go ahead and buy, you simply need to make the payment and the Soft Copy of the policy will soon reach you.
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
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 of registration
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
- Existing insurance details
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.
- Registration number of the car
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.
- Type of policy
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.
- Claim history
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 –
- The type of car
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
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.
- Type of policy selected
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.
- Safety devices installed in the car
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.
- Age of the car
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.
- Available discounts
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.
- Location of registration
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.
- Add-ons selected
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 to Reduce Car Insurance Premium Price?
Car insurance is not just a legal mandate, but also a convenience, however, it comes at a price. It is often suggested that the car insurance policy should not be bought only because it was the cheapest, as in case of an accident, the coverage might not be enough. But at the same time, there are certain ways in which you can reduce the premium of your car insurance. Let us take a look:
- Pick the right kind of policy
Though comprehensive insurance is often recommended, if you have a car that is too old or if you do not drive it much, you can opt for a third-party liability only insurance policy. You can also opt for Pay As You Drive Insurance, which charges the premium based on the distance a car covers in a year.
- Choose Add-Ons carefully
You may feel tempted to cover your newly-purchased car in every way possible, but make sure you invest in add-ons that you really need. For example, if you are someone who mostly commutes within the city, you may not require Roadside Assistance Cover.
- Avoid too much of car upgrades
Modification and accessorising your car can also increase the premium price. Also, keep in mind that if you inform your car insurer about the major modifications, there is a chance your claim may get rejected.
- Keep your NCB intact
Do not make small claims. Slight dents, scratches etc are everydays problems that are often difficult to avert. However, making a claim for them may make you lose your No Claim Bonus. If you drive cautiously and not make claims you can save up to 50% on your premium.
- Get Anti-theft Devices
The right anti-theft devices can help you in not only keeping your car safe from robbery, but also lower the insurance premium.
Buy car insurance Online
Another easy way to save on the premium is to buy an insurance policy online. You can easily compare the different policies offered by different companies and then choose the one that is the most affordable. Turtlemint also offers you deals and discounts on certain car insurance policies.
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 –
- You get the list of available plans with their benefits and premium comparison.
- Comparison is easy with the details available at your fingertips
- You can include add-ons and see how they affect your premium
- You also get the premium estimate beforehand
- The calculator also helps you in buying the plan online. You simply have to click the purchase button and the policy is issued or renewed instantly.
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. Watch out for deals and discounts that are often available on Turtlemint.
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.
No, contact details are not compulsory when calculating car insurance premium. However, if you provide the details, you can get personalised help in comparing and buying a car insurance policy.