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Car Insurance Premium Calculator

A car insurance premium calculator is an effective tool that allows the potential buyer to check and compare premium quotes from different insurance companies. With the help of this, an individual can go with the best car insurance plan within his/her budget.

Why Online Car Insurance Premium Calculation is Important?

'Why do I need an online insurance calculator when I can directly speak to the agents about the same?'

Well, this is the most common notion among people these days. But the thing they don't understand is that these agents do charge their commission, which results in an increased premium amount. They can also share partial suggestions for their benefit.

So, before buying a car policy, you need to get an estimate of your premium amount through an online car insurance premium calculator.

Let's understand the importance of a car insurance premium calculator with an example-

Vidya is a corporate employee. The location, pay and office environment is according to her desires. However, after a few years, the office location changes, and Vidya decides to commute daily through her vehicle. She buys a new car and looks for a car insurance policy.

After a deep research, she is greeted with many car insurance plans but is unable to choose the best among them. She then decides to take the help of an agent but that doesn't work as well. Confused and frustrated, one of Vidya's colleagues suggests to her about the online car insurance plans.

She enters the required details online (vehicle number, city & RTO, car brand and variant, fuel type, etc.) and the result makes her confident about how much she should invest in a car insurance plan. She selects a plan and manages to save around 20% as compared to the plans offered by the agent.

Car Insurance Premiums Calculated

Benefits of Using Online Car Insurance Premium Calculator

As we have already discussed the importance of online premium calculators, here are a few reasons, which make it beneficial as well.

  • Gives a premium payable amount to the potential buyer.
  • It helps to make more informed decisions and allows us to understand the premium breakup done by the insurance company.
  • While on the tool, you can change the variables of insurance policies to see how the premium changes accordingly. It's an excellent tool to learn the nuances of a plan, which can have a positive effect on your buying decision.
  • You can also take a look at the different add-ons like key replacement cover, tyre protection cover, zero depreciation cover, etc. and choose the best among them.
calculator PX

How Does a Car Insurance Premium Calculator Work?

Every Car insurance company has its own set of rules for calculating the premium of car insurance. However, the factors that are considered by most insurers are listed below:

Premium Calculator For New Cars

Below is the list of details you need to provide while calculating the premium for insuring a new car:

  • The name of the car manufacturer
  • The model of the vehicle
  • Year of manufacture
  • Personal details of the owner-driver
  • State of registration of the vehicle
  • Other details

Premium Calculator For Old Cars

To calculate the premium for used cars, you need to provide the following details:

  • Type of car
  • Fuel type
  • Details of the existing car insurance policy
  • Registration number of the car
  • Details regarding the change in ownership (in case of second-hand cars)
  • Claims for previous years, if applicable
  • Other details

Let's take a look at the third-party premium rates-

Engine Capacity

Premium with effect from 16th June 2019 (Rs.)

Not exceeding 1000 cc


Exceeding 1000 cc but not exceeding 1500 cc


Exceeding 1500 cc


**Last Updated on 13-11-2020

The basic formula fixed by IRDAI for calculating premium:

Own Damage Premium – (No claim bonus + discounts) + Liability Premium

For a better explanation of the topic, let's take a look at the table below.


Manufacturing year (2018)

Car Insurance with NCB

Ex-Showroom Rate

Rs. 6,85,000





Insured Declared Value

Rs. 4,79,500


Own Damage Premium


Rs. 9446.15

No Claim Bonus Discount


Rs. 1889

Total Own Damage Premium

Rs. 7557


Personal Accident Cover

Rs. 100


Legal Liability Paid to the driver

Rs. 50


Compulsory Third Party Cover

Rs. 3221


Net Premium

Rs. 10,928


Service Tax


Rs. 1530

Total Premium

Rs. 12,458


**Last Updated on 13-11-2020

What Are the Factors that Affect Car Insurance Premium?

Many factors affect car insurance premiums. Some of the notable ones are mentioned below for your reference.

  • Insured Declared Value (IDV): It is the current value of the car (according to the market). The greater the IDV, the higher is the premium and vice-versa.
  • The Vehicle Model: The vehicle one drives has a major effect on the premium value. For example, luxurious car owners have to pay a higher premium because their parts are expensive to get replaced.
  • No Claim Bonus: If you have the benefit of no claim bonus (thanks to a claimless year), then you can save up to 50% on your own-damage premium.
  • Automobile Memberships: If you have a membership of the Automobile Association of India, you can avail of the advantage of a reduced premium.
  • Anti-Theft Devices Discount: You can also go for anti-theft devices, which are approved by the Automotive Research Association of India, and get a 2.5% discount on the premium.
  • Location: The area you live in affects the amount of premium. For example, areas that are prone to damage (hilly areas) have a higher premium.
  • Demographics: Demographics like age, marital status, and gender also affect the premium. For example, old drivers are more prone to accidents because of poor eyesight and slow reflexes.
  • Fuel Type: As compared to CNG cars, you will have to pay less premium for your petrol/diesel car.
  • Add-Ons: If you wish to take additional protection for your vehicle, add-ons are the ones to look for. However, you have to pay an extra premium to avail of its benefits.

How To Reduce Car Insurance Premium?

Everyone knows the importance of having comprehensive car insurance. But due to budget issues, people stick to the basic third-party liability coverage, which doesn't offer complete protection at the time of need.

With the help of our experts, we at, have penned down a few points that can help you in reducing the premium amount of your car insurance policy, so that you can invest in a better policy. Let's check them out.

  • Voluntary Deductible : It's the amount that you pay from your pocket (towards a claim) before your policy covers the rest. It's recommended to go for a high deductible option, as it will help you in saving more.
  • Avoid Filing Small Claims: Don't file a claim for minor expenses. It will help you in reducing the premium to a great extent with the help of no claim bonus that you get for every claimless year.
  • Transfer Of NCB: If you are going to buy a new car and sell the old one, don't forget to transfer the NCB. NCBs are linked to the insured and not the policy or the car. It will help you in saving a decent amount.
  • Compare And Buy Online: Don't be in a hurry to buy car insurance. Always compare policies from different providers, and choose the one that offers maximum benefits and lies within your budget.
  • Pay Only For Your Needs: Just because your friend bought a higher coverage policy, doesn't give you a reason to blindly follow the same path. Everybody's needs are different. Just focus on yours and buy the policy accordingly.
  • Install Anti-Theft Devices: You must install anti-theft and protection devices in your car. The insurers take it as a plus point and offer discounts on the premium.

Car Insurance Premium Renewal

Generally, car insurance policies come with a 1-year tenure. As you close in on the expiry date, you have to renew the policy by paying the premium. This is an on-going process and can be done online from the comfort of your home.

General things that you should keep in mind-

  • The gap in premium renewal should be avoided as it will affect the calculation of premiums.
  • Don't switch your car insurance providers frequently as it may lead to higher premium value.
  • Do not blindly take insurance from any service provider. Do thorough research before investing in any car insurance policy.
  • Add-on that you choose should be relevant. For example, in the case of new cars, depreciation cover may not be of much use. This makes a difference in the premium calculation.

Before zeroing in on a car insurance plan, compare and calculate different policies with their premium rates


1. What is the percentage of depreciation for calculating IDV?

Here is a schedule of depreciation % for calculating car's IDV:

Age of vehicle

Depreciation rate

Not exceeding 6 months


6 months to 1 year


1 year to 2 years


2 years to 3 years


3 years to 4 years


4 years to 5 years


2. Can I pay my premium for car insurance in installments?

No insurance company offers the provision to pay the premium of car insurance in instalments.

3. What are the main components of a car insurance premium?

There are three key components of a comprehensive car insurance premium:

  • Third-party (Liability) Cover
  • Own Damage (OD) Cover
  • Personal Accident Cover

Last updated on 13-11-2020