Learn about the factors affecting your vehicle insurance online quote so you can make more informed decisions and save money!
How Is The Cost Of Your Car Insurance Determined?
Our insurance policies’ fine print contains much information, including the Terms and Conditions, Exclusions, and Special Cases. But we are always informed in advance about premiums. Generally speaking, though, we only hear the number without knowing how it was calculated or the process involved.
The following variables affect the cost of car insurance:
The car’s IDV (Insured Declared Value), The vehicle’s age and type, The engine’s cubic capacity Zone of geography
Three Car Insurance Premium Aspects
The following three coverages make up your vehicle insurance online premium:
Third-Party Insurance
If you own a car in India, you must have TPL coverage.
Third-Party Liability (TPL) protects you against any harm your insured vehicle causes to another person or their property, even if it results in passing away or severe financial loss.
However, TPL does not pay for any repairs you have to pay for, so it is wise to choose a policy that also covers losses from damage to your car.
The Insurance Regulatory and Development Authority of India (IRDAI) sets the TPL premium, which is determined by the vehicle’s capacity. You can do a car insurance check online to check on the premium to be paid. Claims are subject to terms and conditions set forth under the motor insurance policy. #
Cover For Own Damage (OD)
The OD cover is not required, but it is beneficial. If an accident or a natural disaster—such as an earthquake, fire, storm, etc.—damages your car, it reimburses your expenses. The deal is that higher premiums are correlated with higher Insurance Declared Values, or IDVs, and vice versa. Therefore, the IDV drops as your car ages. Claims are subject to terms and conditions set forth under the motor insurance policy *
The Indian Motor Tariff determines the premium for OD cover as a percentage of IDV.
The formula to determine IDV is:
IDV = Your car’s showroom price + any accessory costs – depreciation value calculated by (IRDAI)
Example:
Let’s assume the following values for an example:
- Showroom Price of the car: ₹800,000
- Accessory Costs: ₹20,000
- Depreciation Value (calculated by IRDAI): 10%
Now, we can substitute these values into the formula:
IDV=₹800,000+₹20,000−(10%×₹800,000)
IDV=₹800,000+₹20,000−₹80,000
IDV=₹740,000
So, in this example, the Insured Declared Value (IDV) of the car would be ₹740,000.
The following is the formula to determine the OD premium amount:
Own Damage premium is equal to IDV x [Insurer-determined Premium Rate] + [Options (such as extra coverage)] [Concessions and benefits (theft concession, no claim bonus, etc.)]
Personal Accident Cover
This part of your car insurance premium protects you from events that could cause you to become disabled in addition to accidents. Being fully protected is essential because the likelihood of becoming disabled is higher than nearly any other result. Almost 3 lakh people lost their lives in traffic accidents in 2014. However, 5 lakh were rendered permanently disabled or suffered severe injuries. Claims are subject to terms and conditions set forth under the motor insurance policy.
Other Riders
Car insurance riders, or add-ons, offer extra services and protection for a small fee. Examples include Roadside Assistance for breakdowns, NCB Protection for maintaining your No Claim Bonus, and Engine Protection for water damage. Each rider enhances your car insurance, ensuring comprehensive coverage in all situations. Make sure you do the Bajaj Allianz car insurance renewal online on time to enjoy all the benefits. Claims are subject to terms and conditions set forth under the motor insurance policy.
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Standard T&C Apply
Visit the official website of IRDAI for further details.
All savings are provided by the insurer as per the IRDAI-approved insurance plan.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
