How to Calculate Car Insurance Premium in India in 2021?

If you are planning to buy a new car, then you must invest some time to find the perfect insurance to go with it. Buying car insurance is not only mandatory by the law but also recommended if you don’t want to shell out tons of money in case your car gets damaged. 

Whether you are purchasing a new insurance policy or renewing an existing one, the premium calculation is an essential requirement. In this article, we will elaborate on the details related to such calculations. We will also delve into various crucial questions regarding a policy purchase, premium calculation, and finding suitable policies as per your need. Note that there are calculators available online which can help you know your car insurance premium costs.

Why is it beneficial to use car insurance premium calculators? 

It is a good idea to check your car insurance price on a premium calculator before making any purchases. The reasons being: 

1. A car insurance premium calculator assists you evaluate different insurance premiums directly and helps you make a cost-effective decision for you and your car. 
2. When you are using a four-wheeler insurance premium calculator, you might notice how a particular change in factors can increase or decrease the premium cost. You can appropriately try assorted options and see what works best for you. 
3. After all, it is your car, and the minimum you can do for it is making an assured decision for its protection. A vehicle insurance calculator assists you to see by yourself how your insurance premium is decided.

How to use an online calculator for motor vehicle insurance premium calculation?

Most of the popular insurers have motor insurance premium calculators on their websites. Calculating the insurance premium of cars is quite simple. Just visit the premium calculator enter the information on the insurance calculator as mentioned below, and you will get the results in a few seconds.

Step 1: Enter your car’s registration number and your contact details.

Step 2: Provide your car’s year & city of registration, make, and model.

Step 3: Decide between a third-party liability cover and an all-inclusive plan. 

Step 4: You will then see your insurance premium computed on the calculator.

Which one to choose between third-party and comprehensive car coverage?

The third-party policy is generally the most opted insurance policy in India as it is mandatory under the Motor Vehicles Act. However, it only covers damages and losses suffered by a third party, automobile or general property.

If you want all-around protection for your car, then opt for a comprehensive motor vehicle insurance policy. It addresses damages to your own vehicle as well as third-party liabilities. Clearly, comprehensive coverage is a better option as compared to third-party coverage due to its widespread benefits.

Bonus tips to reduce the cost of car insurance premiums in 2021

• Maintain a safe driving record: It is a significant aspect if you want to save more on your policy premiums. This practice will not only keep you safe while driving by preventing unfortunate accidents but will also help you become eligible for a No Claim Bonus for every claim-free year.
• Renew policy on time: Try to renew your car insurance policy before its due date. It will eliminate the inspection procedure for your car.
• Add-ons: Add-ons are a wonderful way to add an extra level of coverage to your car, but it raises the premium value too. So, pick the relevant add-ons for your car.

Though your insurer determines the premium of your policy depending on the age of your car and other risk factors involved, these tips will help you avoid unnecessary expenses. The insurance cost for a recently bought car is usually higher compared to that for old cars. But then, even the IDV and sum assured are higher for new cars, allowing you to get the maximum benefit against what you pay. 

Please note that a car older than five years may not be eligible for certain add-ons such as zero depreciation cover and return to invoice cover. When purchasing car insurance online in India, you can further compare insurance providers based on related benefits before finalizing a policy.