There are various factors that contribute to car insurance price and the preceding list provides a detailed explanation. The cost of car insurance varies depending on the type of policy that you choose to buy. For example, third party liability coverage for small cars costs Rs.1,334 per year while own damage cover for large cars costs Rs.2,639 per year on average in Mumbai.
What is Car Insurance Price?
Car insurance price has always been an expensive investment because it is a financial product that is not only expensive to maintain but also to cover. Car insurance price is based on the risks covered by an insurance policy.
Car insurance is a type of insurance that covers you and your vehicle financially. It can cover your liability for damage or injury to other people, damage to other cars, and even the loss of your own vehicle.
A car insurance plan is a contract between the car owner and the insurer which helps protect the car owner from financial loss in case of an accident. The three types of insurance plans are first party, third party, and own damage. The first-party covers everything from injury to property damage caused by its insured vehicle. Third-party covers any injury to a person who might be hit by the insured vehicle. Own damage is more limited coverage for any damages that might be inflicted on one’s own vehicle.
Types of Car Insurance Plans in India:
Car insurance prices can be divided into two types available in India, their eligibility criteria, and how much they cost. third party and own damage. Third party cover protects you and your vehicle from any third-party claims, while own damage covers your vehicle against damages caused by natural calamities or accidents. Own damage rates vary with how expensive is your vehicle and what kind of coverage is required for it.
1. Third Party Car Insurance price: Third-party insurance covers damage that may have been caused to another person or property. This includes both parts of the car not owned by you and damages caused to other people. Own damage insurance only covers damages that may have been caused by your vehicle. Third-party car insurance coverage is compulsory in India. The price of third party insurance will vary depending on which type of car you are driving. Third party cover also varies with age, type, model, engine capacity, and area where you live in India.
Third party insurance mandates that the insurer will cover any expense incurred if a personal accident cover occurs involving another vehicle, but not if it is due to your own fault. The cost for this cover depends on the type of vehicle you are driving and also the region where you are based in.
2. Own Damage Car Insurance Price: Own damage car insurance price is much cheaper than third-party, so it’s a good option for those who are looking for affordable rates or do not have many accidents in their history. On the other hand, if you’ve had a lot of accidents or your car is worth a lot, then third-party will be better for you as it offers more coverage and is more expensive. Own damage covers the expenses of repairing the car if it is damaged by you or any other person.
The cost for your own damage cover depends on what kind of car it is and how much coverage is being provided by your insurer.
3. Comprehensive Cover: Comprehensive cover includes things like fire, theft, and vandalism. You might want this if you have had problems with these in the past or if you often leave your car at a public parking lot.
Types of Car Insurance Price List in India:
The car insurance price calculator has two components namely Third party (TP) premium and the Own Damage (OD) premium. While the Third party premium rates are fixed by the IRDA, the own damage premium rates are fixed by the insurance companies. The third party premium rates are subject to change each year depending on the claim amount settled and other factors that are taken into consideration by the IRDA. The car insurance price list contains both the third party premium and the own damage premium or 1st party premium of your car.
The car insurance price list in India is subject to change each year depending on the third party premium as well as the own damage premium. Even though the 1st party premium is constant there might be changes in the third party premium which changes the overall price list of the car insurance premium.
1.) Third Party Car Insurance Price List
Third party car insurance price calculator comparison. The third party rates of car insurance price are fixed by the Insurance Regulatory and Development Authority of India based on the Gross Written Premium collected and the Claims settled for that particular year and the increase of third party premium rates are subject to the final decision taken by the IRDA.
The third party price list for the year 2020-21 is proposed to be changed and the new price list of third party car insurance is as below:
||Existing Rates FY 2019-20
|Not exceeding 1000cc
|Exceeding 1000cc but not exceeding 1500cc
It can be observed from the above table that the proposed increase in the third party price list for car insurance premium is not more than 5% of the existing premium rates. The 5% change in the proposed third party premium is due to the increase in the claim settlement ratio. The claims in case of third party accidents are taken to the honorable court where the court awards the claim amount depending on the earning capacity of the individual, age of the individual, etc. The insurance companies are bound to pay the claim amount awarded by the honorable courts and hence the major portion of the premium collected by the insurance companies ends up in the third party claim settlement.
2.) Own Damage Car Insurance Price List
As discussed above the other component used in the premium calculation of car insurance price is the own damage premium. The own damage premium is determined by the insurance companies and differs from one company to the other. The own damage premium in car insurance rates is calculated on the basis of Insured Declared Value, Zone of operation, and the cubic capacity of the car.
The own damage premium price list in car insurance is determined by the below formula which is mentioned in the Indian Motor Tariff:
|Age of the Car
|Not exceeding 1000cc
||Exceeding 1000cc and not exceeding 1500cc
||Not exceeding 1000cc
||Exceeding 1000cc and not exceeding 1500cc
|Not exceeding 5 years
||3.039% On IDV
||3.191% on IDV
||3.343% On IDV
||3.127% On IDV
||3.283% On IDV
||3.440% On IDV
|Exceeding 5 years but not exceeding 10 years
||3.191% ON IDV
||3.510% ON IDV
||3.283% ON IDV
||3.447% ON IDV
||3.612% ON IDV
|Exceeding 10 years
||3.267% ON IDV
||3.430% ON IDV
||3.594% ON IDV
||3.362% ON IDV
||3.529% ON IDV
||3.698% ON IDV
From the above table, the own damage premium can be calculated. Insurance companies are bound to operate with these rates and are not allowed to charge anywhere more than these rates. Almost all the insurance companies charge only half of these rates to match the competition in the Indian market.
Car Insurance Price Calculator:
Car insurance is a complex topic and many people are put off by the high price. The truth is that car insurance prices vary depending on what type of coverage you choose.
An insurance company will calculate your premium based on your age, how old the car is, where you live, what type of coverage you want (e.g., third party or own damage), and whether or not you have had an accident in the last 5 years.
It is important to know what factors affect auto insurance rates. These rates will differ depending on the car model, the company, and the location. A car insurance price list can be considered as a tool that helps people understand what coverage is needed and how much it will cost them. This would help people to purchase the right amount of coverage and have a better understanding of what they are paying for.
Car Insurance Price List: Third Party - Own Damage
||Amount (in Rs)
|Own damage for death and disability up to 1 lakh
|Third party fire and theft
Premium Price List for Third-Party Car Insurance:
The IRDA.gov.in, in June 2019, published the latest third-party car insurance policy rates for 2019-2020. The rates are as follows:-
|CUBIC CAPACITY (CC) OF CAR
||THIRD-PARTY INSURANCE PREMIUM
|Up to 1000 CC
|Over 1000 CC up to 1500 CC
|Over 1500 CC
The average cost of car insurance price has not increased that much in the last few years, but it has increased over the past five years. It started at an average of about Rs 2400 per year and now it's around Rs 4000-5000 per year. The reason behind this increase was because there was a need for regulation and other factors like theft or damage to vehicles which should be covered by insurance companies. So, it's not true that this price has increased to Rs 40,000-50,000 per year as some people claim.
Factors that affect the Car Insurance Price India:
The premium of car insurance price depends on the following factors:
- IDV (Insured Declared Value) of the vehicle: Insured Declared Value of the car is its manufacturer’s showroom listed price minus the cost of depreciation. IDV also equals to the maximum insured sum.
- Type and age of the vehicle: Your car’s model and make also decide the premium price of the insurance policy.
- Geographical zone: The car insurance premium is also affected by the location of the RTO at which the car is registered. Two car insurance policies for the same car and from the same insurer will be different for cars registered in different cities or in different areas of the same city.
- Age and gender of the owner-driver: The more the age of the car, the more will be the car insurance premium price and vice versa.
Other factors such as:
- Cubic capacity of the engine
- Fuel type
- The profession of the owner
- Voluntary deductible
- No Claim Bonus (NCB)
- Anti-theft device installation
Now let us have a look at how the premium of the same car differs with different insurance companies. The below table shows the list of insurers that offer a comprehensive car insurance plan at the lowest insurance price premium for a brand new Hyundai Grand i10 Petrol variant (1197cc) registered in Kolkata (West Bengal, India).
|New India Assurance
How To Reduce Car Insurance Premium?
The car insurance premium is one of the most important factors people consider when buying a policy. Owners-drivers are always looking out to get extensive coverage at affordable premiums. Here are a few tips that will help you reduce your car insurance premium:
Additional Security Measures:
If you choose to install additional security devices in your vehicles, such as parking sensors and anti-theft apparatus, you effectively reduce the risk associated with your vehicle. A reduced liability risk leads to lower premiums for your car insurance.
When you renew your policy after a claim-free year, you get a discount on the premium you have to pay. This discount can go up to 50% for five consecutive claim-free years. However, even a single claim will reset the NCB back to zero. Avoid making claims against your policy for minor damages to keep your NCB from lapsing.
Insured Declared Value:
When you get a car insurance policy, the company runs an assessment to establish the highest claim value for your vehicle, known as the Insured Declared Value (IDV). However, you can reduce the vehicle’s IDV in exchange for a reduced cost of the premium. But remember that lower IDV entails a lower reimbursement in case of theft or total damage to the car.
Increase Voluntary Deductibles:
A voluntary deductible is a choice by the policyholders to pay a proportion of the claim amount while the insurance company pays the rest. When you raise a claim, the insurer will deduct this amount and settle the difference. By opting for higher deductibles, you can substantially reduce the cost of your car insurance premium.
Is the Cheapest Car Insurance Price the Best Car Insurance?
It is not necessary that the car insurance available at the lowest premium price is the best insurance plan for your car. Besides, the cost of purchasing a car insurance premium, you should also consider the following factors while selecting car insurance for your much-loved car:
1. Availability of Customer Support
Some car insurers offer customer assistance services on all days round the clock, while some offer customer support only during specific timings on specific days.
2. Claim Settlement Ratio
The claim settlement ratio tells the percentage of claims that an insurer has settled out of the total number of claims received in a financial year. It is an important benchmark while choosing a car insurance plan. An insurer might be offering car insurance at the lowest rate but may not feature a good claim settlement ratio and vice-versa.
3. Availability of Add-ons
Add-ons are extra covers that enhance the coverage of a comprehensive car insurance policy and a standalone own-damage car insurance policy. Some insurers offer more types of add-ons than other insurers. So while choosing car insurance, you should check if your insurer offers the add-ons you want.
4. Ease of Policy Purchase/Renewal Process
It is another parameter that must be taken into consideration at the time of policy purchase. You should check if the insurance purchase/renewing your car insurance is easy, instant, and paperless or not as per your convenience.
How to Buy Car Insurance Online?
How to check car insurance online? You can buy car insurance online through the insurer’s website or mobile app. The steps to buy are similar to that of the Comprehensive car insurance policy. If you have standard car insurance, you can choose the add-on while renewing the policy. However, you can also choose the add-on at the time of purchasing the vehicle. Below are the steps to buy car insurance online:
- Step 1: Visit the policybachat website.
- Step 2: Enter your vehicle registration number to renew the policy. You can also use the same steps in case you want to change the insurance provider.
- Step 3: You will be prompted to select different types of Add-on covers. Choose the Zero or Nil Depreciation Cover as an add-on.
- Step 4: Pay the required premium and get your policy document instantly to your registered email address.
How to Renew Car Insurance Online?
The process of car insurance renewal is simple, especially if you are doing it online. It is similar to renewing your standard car insurance policy. Below are the steps to renew car insurance online:
- Step 1: Visit the insurance provider’s website.
- Step 2: Sign in with your credentials or if you are changing the insurance company, then enter the registration number of the vehicle.
- Step 3: Select the add-on before you pay the premium.
- Step 4: Pay the premium and receive your car insurance policy to your registered email address.
FAQs of Car Insurance Prices in India?
Does the car model impact or affect the car insurance premium?
Yes, the car model is an important factor while calculating the car insurance premium. The Third-party premium is dependent on the cubic capacity of your car's engine. Make-model also determines the market value or the Insured Declared Value (IDV) of the car. Higher IDV usually results in increasing the premium amount.
How does the car insurance premium calculator help in determining the car insurance premium?
The calculator lets you select the cover, change the IDV, include add-on covers and NCB, and based on that information lets you know the premium you will have to pay to the insurer. This lets you make an informed choice before you buy the best car insurance policy.
How do I raise a claim when I need to? What information should I provide?
You can raise a claim by visiting PolicyBachat or by calling us on 1800-123-4003. While raising a claim, you should provide the following information:
- Your contact number or the vehicle number
- Policy number
- Description of the incident and photographs of the vehicle (if possible)
- First Information Report (FIR) in case of theft, or damage to any third-party or their property.
You will also get a periodic status update on your claims. Also, the process might vary depending upon the nature of the claim.
Does the location of the car impact the car insurance premium rate?
Yes. The location of the car is an important factor for calculating the insurance premiums online. The cost of the car varies in different states and cities. This has a direct impact on IDV and in turn the insurance premiums.
Why should you look beyond premium while buying car insurance?
When it comes to protecting your car against accidental damages or losses, you need to look beyond the premium of the insurance plan. Apart from the cost, it would be best to consider other vital factors such as the insurer's services, ease of insuring your vehicle, claim settlement process, and customer service for a holistic insurance plan. Consider these factors while shopping for car insurance for wide-ranging benefits apart from the affordability of the insurance plan.
For the exact motor insurance price list in India please visit the Policybachat website and get the full car insurance price list for your car from all the top insurance companies.