Comprehensive Insurance Price in India (New): What Decides Your Car Insurance Premium

Every car insurance premium is calculated based on several factors, including the make and model of the car, the car’s age, Insured Declared Value (IDV), geographical location, add-ons, etc. A better understanding of these factors helps you evaluate your insurance premium more easily. Read on to learn about these key factors that determine the comprehensive car insurance price in India.

How is Comprehensive Car Insurance Premium Calculated in India?

A car insurance premium is easy to calculate using the car insurance premium calculator. Enter your car’s registration number, coverage and add-ons you need, along with other details, and your premium quote reflects on the screen instantly.

Combining both third-party and own-damage cover comprises the comprehensive insurance. The premium amount is thus calculated as:

Comprehensive Car Insurance Premium = Premium for Third-party Car Insurance + Premium for Own Damage Cover

Now, we will see how the premiums for third-party and own damage cover are calculated.

How is Your Third Party Car Insurance Premium Determined?

The premium for third party car insurance is standardised by IRDAI across all insurers. It is calculated based on the engine capacity (cubic capacity or CC) and fuel type of cars. The rates are subject to change periodically.

How is Your Own Damage Cover Premium Determined?

The formula for own damage cover premium calculation is:

Own Damage Premium = IDV × Tariff Rate (fixed by the insurance provider) + Add-ons – Discounts

The premium for own damage cover is calculated considering your car’s IDV, tariff rates as determined by the insurance provider, NCB discounts and add-ons you select. Unlike third-party insurance, the premium for own damage cover is based on several factors.

What are the Factors that Determine Your Car Insurance Premiums?

Listed below are the factors that determine your car insurance premiums:

IDV

The Insured Declared Value (IDV) is the current market value of your car after deducting depreciation. The higher the IDV, the higher your premium. In contrast, a lower IDV reduces the premium amount.

Make, Model and Age of Car

Premium depends on the make, model and age of a car. New cars with high performance and luxury vehicles typically have higher repair and replacement costs, which results in higher premiums.

Add-ons Chosen

Your car insurance premium depends on the add-ons you choose. Selecting add-ons such as engine protection or zero depreciation increase your policy coverage but also raises the premium amount.

No Claim Bonus

A No Claim Bonus is a reward for not filing any claim during the policy tenure. The higher the NCB, the higher the discount and the lower the premium.

Geographical Location

Another factor in determining your premium is where the vehicle is registered or primarily used. Regions prone to theft, accidents, or high traffic, tend to have higher premiums.

Driving Record and Claim History

If you drive safely and have fewer claims in the past, your premium will be lower. Frequent claims can cause the premium to increase during policy renewal.

Voluntary Deductibles

A voluntary deductible is the amount you agree to pay out of pocket during claims. The higher the deductible, the lower the insurance premium.

Get Comprehensive Car Insurance with TATA AIG for Enhanced Protection

Understanding how a comprehensive car insurance premium is calculated helps you select the right coverage without excess spending. You can compare policy features, choose the right add-ons, and drive responsibly to get better value while keeping your vehicle well protected from unforeseen risks.

TATA AIG Comprehensive Car Insurance offers robust third-party and own damage coverage for damages due to accidents, theft, natural calamities or man-made events. Get customisation options, a wide network of cashless garages across India and a hassle-free online buying and renewal process. Choose TATA AIG to safeguard your car with confidence, with reliable claim support and flexible coverage options.

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The content may be for information and awareness purposes and does not constitute any financial advice.