With the rising car maintainence costs the ever-increasing number of vehicles on road, having the right car insurance is paramount. Securing your vehicle with the appropriate insurance policy is not only a legal requirement in many places but also a crucial step towards protecting yourself and your investment. One essential aspect of buying a car insurance policy is having to pay the premium amount associated with it.
In this article, we will explore what a car insurance premium calculator is and how to use it. Know the details required for calculation, the benefits that a car insurance policy premium calculator offers, and the intricacies of calculating it.
What is a car insurance premium calculator?
A car insurance premium calculator is an online tool that aids in determining the insurance cost for a vehicle. This auto insurance premium calculator helps define the amount you will likely spend on car coverage. It is beneficial not only because it saves time but also because it gives you a fair idea of the cost associated with buying an insurance coverage.
A car insurance premium calculator helps estimate insurance costs based on specific factors, such as car make, model, age, location, and driver details. By inputting these variables, users can quickly compare insurance quotes and select the most suitable coverage, making informed decisions about their car insurance needs.
How to use a premium calculator online?
Using an online car insurance premium calculator is a straightforward process that allows users to customise their insurance plans according to their specific needs. You can check the insurance premium for your car if you the buy a policy through Bajaj Finance, by following the steps below:
Step 1: Click on ‘Get Quote’, at the top of this page.
Step 2: Select the type of vehicle. Enter your car’s registration number, PIN code, and phone number.
Step 3: Enter the following details:
- Vehicle’s make and model
- Fuel type
- Variant
- Registration year
- Manufacturing year
After entering all these details, click on ‘Get Quote’.
Step 4: Next you need to fill in a few details. These include:
- Insured Declared Value (IDV)
- Status of claims made in the past
- Choose add-ons for your policy
- Type of plan – Comprehensive/third-party/own-damage
- Expiry date of existing policy, if applicable
- Vehicle details
Step 5: A list of insurance policies along with their premium will be available. You can choose a policy as per your requirements.
After measuring and analysing all the details, the premium is finalised. Once you choose a policy, enter your personal details, and make the payment, the policy is yours. Since Bajaj Finance offers multiple insurance policies, you can choose the one that best suits your needs and budget and accordingly make a choice.
Key details you need to calculate your car insurance premium
To get the most accurate premium estimate for your car using a car insurance premium calculator, you must provide the maximum required information. The basic information that you would need when calculating the price for your car insurance premium using the car insurance calculator includes the following:
- Vehicle make and model
This is essential information when calculating premiums and often plays a significant role in determining policy rates. - Year of manufacture and registration
The vehicles' production year also plays a significant role in the policy price calculation. You need to provide the vehicle’s registration number as well. - Ownership details
It is required to have complete ownership details to compute the policy cost. You need to provide your phone number and PIN code. - Fuel type and variant
You need to provide the information if the car is diesel, fuel, or CNG. Also, the variant of the car, needs to be mentioned. This plays an important role in calculating the premium. - Personal information
After the premium for your car insurance is calculated, you also need to provide your personal details like owner’s name, date of birth, and residential address. These details must be kept handy.
Benefits of car insurance calculator
The benefits of using a car insurance premium calculator are far-reaching. Given below are a few:
- Cost transparency
The calculator provides a transparent breakdown of the factors influencing your insurance premium, helping you understand how each element contributes to the overall cost. - Customisation
Users can customise their coverage preferences and instantly see how adjustments affect the premium. This allows individuals to tailor their insurance plans to meet their unique needs and budget constraints. - Time efficiency
Calculating insurance premiums manually can be time-consuming and prone to errors. The online calculator streamlines the process, providing quick and accurate results within minutes. - Comparison shopping
With the ability to obtain instant quotes from various insurance providers, users can compare premiums and coverage options. This promotes a competitive insurance market, allowing consumers to make cost-effective decisions. - Informed decision-making
Armed with detailed information about their insurance costs, individuals can make informed decisions about their coverage. This knowledge helps them choose the right policy that aligns with their financial situation and risk tolerance.
Know how your car insurance premium is calculated?
Car insurance premiums are determined using various factors that assess risk and coverage needs. Car insurance premiums are calculated using a simple formula:
Car Insurance Premium = Own Damage Premium – (No claim bonus + discounts) + Third Party Liability Premium that is fixed by the Insurance Regulatory and Development Authority (IRDAI) of India
Here are the factors that are taken into consideration while calculating car insurance premiums using a car insurance premium calculator:
Factor |
Description |
Vehicle Details |
Make, model, age, engine capacity, and value of the car affect premium rates. |
Policy Coverage |
Comprehensive or third-party coverage level influences premium amounts. |
Insured Declared Value |
IDV is the maximum amount the insurer will pay in case of total loss or theft. |
No Claim Bonus (NCB) |
Discounts offered for claim-free years. |
Location |
Premiums can vary based on the city or area where the car is registered. |
Driver's Age and History |
Age, driving experience, and history of accidents or claims impact premiums. |
Add-ons |
Additional coverage options like zero depreciation, roadside assistance, etc. |
How to reduce car insurance premium?
To lower car insurance premiums, consider these strategies:
Opt for higher deductibles
Increasing deductibles can reduce premiums.
Compare quotes
Get quotes from multiple insurers to find competitive rates.
Maintain a good driving record
Safe driving leads to lower premiums and NCB benefits.
Avoid car modifications
To lower your premium amount, try to avoid modifying your car.
Install safety features
Anti-theft devices and safety features can lower premiums.
Avail No Claim Bonus (NCB)
Continuously renewing without claims earns NCB discounts.
Using a car insurance premium calculator, you can calculate the estimated premium amount and check how you can reduce your premiums even further.
How third-party liability premium rates work
Third-party liability premium rates for car insurance are calculated based on the car’s engine capacity. The rates are predetermined by the Insurance Regulatory and Development Authority of India (IRDAI) and remain fixed. Here's an overview:
Engine Capacity |
Annual Premium Rate (Approx.) |
Up to 1000 cc |
Rs. 2,094 |
1001-1500 cc |
Rs. 3,416 |
Above 1500 cc |
Rs. 7,897 |
Using an insurance cost for car calculator helps you quickly estimate the total premium, including third-party coverage.
Factors affecting car insurance premium
You need to consider several factors when purchasing an insurance policy for your car. A car insurance premium calculator considers some of these factors while estimating the premium of your vehicle. Following are some of the most important factors that affect car insurance premiums:
- Make and model of your car
The model and make of your vehicle impact the insurance premium. A highly valued car corresponds to a higher insurance premium. - Policy coverage
The type of policy coverage you choose also affects the policy rate. A comprehensive car insurance policy covering aspects like accidents, theft, and natural disasters will cost you more. By comparison, opting for only minimum coverage will bring down the premium price. - No claim bonus
A no-claim bonus is an incentive offered to people who do not make claims. The longer you go without any claims, the better discount you receive on the policy rate. - Insured Declared Value
IDV is calculated based on the vehicle's current market value. Higher IDV amounts increase the premium cost. - Add-ons
Additional coverage like zero depreciation, engine protection, and passengers' personal accident cover can be added for extra coverage. However, they lead to a higher premium.
How do you calculate car insurance premium for new and old cars?
For new cars
For new cars, insurance premiums depend on the IDV of the car being bought. The third-party premiums for all cars are decided by the IRDAI as per their engine capacity (CC). The own damage (OD) component of car insurance usually varies as per the car’s IDV or any add-ons bought.
For old cars
Premiums for old cars consider different factors. Calculations involve assessing vehicle specifics, coverage types, and driver history, which vary for new and old vehicles, influencing overall premium amounts.
Calculating car insurance premiums involves specific considerations for old vehicles:
- Vehicle age and value
New cars have higher insured declared value (IDV) and replacement costs, leading to higher premiums. - Depreciation factor
Insurers consider depreciation for older cars, which impacts the insured value and subsequently, the premium. - Coverage type and add-ons
Comprehensive coverage for new cars may include additional costs, while older cars may opt for basic coverage with selective add-ons. - Driver's profile
The driver's age, experience, and claims history affect premiums differently for new and old vehicles. - Condition and safety features
Old cars with upgraded safety features may qualify for lower premiums due to reduced risk.
It is essential to have a clear understanding of these factors to calculate auto insurance rates for the car insurance policy you need. Using a car insurance policy calculator or an online car insurance calculator can help evaluate the policy costs suited to your needs while staying within a budget.
