In the present times, owning a car is more of a necessity than a luxury. Irrespective of the price of the car, the car is a prized possession for its owner. Thus, regular maintenance is a must to ensure the car works properly. Apart from this, the other most important thing is the car insurance.
Many people think that the only factor they need to see is the car insurance price, but this is a myth. There are many other aspects which are important and need adequate attention to ensure there is no financial strain in case of any damage to the car.
The two challenges that come with car insurance are knowing the coverage and the right price. For the latter, you have the car insurance premium calculator.
Let us understand how you can use the calculator to calculate car insurance premiums and also to understand the premium calculation of third-party car insurance and the own damage component.
What is a car insurance premium calculator?
Before we understand how to use a calculator, we need to understand that car insurance has two components. First is third party car insurance, which is mandatory as per law, and the premium for this is fixed by the Insurance Regulatory and Development Authority based on the cubic capacity of the car. This will take care of any damage caused to a third-party property or person in case of an accident.
The other part is Own Damage, which is a choice but ideally should be taken as this will pay for any damage or theft to the car. The car insurance price of this component varies depending on the car model and the add-on covers.
Now, let us see how the calculator can help. With an online car insurance calculator tool, car owners can calculate their car insurance premiums and compare them with all companies. The coverage requirement may differ from one customer to another. As a result, clients who are in the process of acquiring car insurance must compare the various available coverage and premiums to choose the one that fully satisfies their needs.
By entering the registration number of the car, the calculator helps in calculating the price. There is a choice to customise the Insured Declared Value and the add on covers.
Importance of a Car Insurance Calculator
This online tool helps to:
- Save time.
- Helps in decision-making.
- Makes purchasing and renewals of car insurance easy.
- Helps in comparing coverage and premiums.
The calculator is simple to use. The information varies for a new and used car.
Calculating premiums for used cars
To obtain a car insurance premium price for used cars, the user must provide certain details. These include the:
- Registration number
- Previous policy details
- Any previous claim reports.
When calculating the car insurance price for a brand-new car, the user needs to provide specific information, such as
- Year of manufacturing
- Vehicle manufacturer's name
- Vehicle model
- State of registration
- Other relevant details
Premium = Own damage premium - (Discounts + No claim bonus) + Liability Premium (Set by the IRDAI) + Cost of Add-ons
The calculator gives a choice to change the IDV and choose the add-on covers. Once all this is done, the final premium is given, and one can use this to compare car insurance prices and coverage across plans.
Factors affecting car insurance premium
Here are the common factors that can affect your car insurance premiums:
1. Driving history and age
Premiums are lower for drivers who have more driving experience and also for the ones with a history of driving without any accidents. Those with records of accidents or non-violations can expect a rise in their insurance premium.
2. Vehicle type and age
High-end cars or expensive vehicles have a higher chance of theft or damage and may have higher premiums. Similarly, older vehicles may have lower premiums due to their lower IDV.
3. Location
If your car is parked in localities with high theft and vandalism, it could result in higher insurance premium. The location where your car is parked can influence the cost of your insurance premium.
4. Insured Declared Value
This is the current market price of the car, and in case of total damage or theft, the insurance company is liable to give you the price. The premium is higher for a higher IDV.
5. No Claim Bonus
Insurance companies give a discount to the insured for every no-claim year. The NCB accumulates every year, and thus, this can give rise to a 50% discount on car insurance prices.
6. Deductible amount
A high voluntary deductible amount means low premium which makes you pay more out of pocket in case of a claim.
7. Insurance coverage
The specific coverage options you choose could determine your premium amounts. Chances are that you pay a high premium in case you have opted for additional add-ons and riders, thus, one should always choose these wisely.
8. Fuel type
Diesel cars have a higher premium when compared to the petrol variants. Thus, the fuel type of your car will play a role in the premium.
9. AAI Membership and Anti-Theft Devices
Registration with AAI helps the users to get discounts and other benefits, which could benefit in lowering their premium. Also, installing anti-theft and locking devices with an effective immobiliser and alarm can be one of the risk variables of theft which can help with a lower premium.
A car insurance price calculator is an extremely helpful tool for choosing the right policy and coverage without paying a hefty price. Calculating your car insurance premium through online calculator tools involves considering factors such as your car's specifics and your driving history.
As the rates of third-party car insurance are fixed, one can choose the right coverage for the own damaged part that meets your needs and budget. In this way, you will have a comprehensive insurance plan which will take care of all the financial strain in case of a mishap.
Disclaimer - The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to it, and does not guarantee, vouch for or necessarily endorse any of the content.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
