Home Motor Insurance How to Choose the Best Car Insurance Premiums?

How to Choose the Best Car Insurance Premiums?

Car Insurance

Why is car insurance necessary in India?

Car Insurance is a type of insurance coverage that protects the policyholder from financial loss if their car is damaged, destroyed, or stolen. In India, car insurance is necessary for a few reasons.

In India, there are several different kinds of auto insurance. The most common are third-party liability and comprehensive policies. Comprehensive policies offer protection against damage to the vehicle and its accessories as well as protection against theft or damage due to fire, natural disaster, or vandalism. Third-party liability policies only cover damages caused by the insured vehicle to other people’s property or injury to other people caused by accidents involving the insured vehicle.

In India, there are many laws that require drivers to have car insurance in order for them to drive legally on public roads. These laws were enacted following an amendment made in 2016 that increased penalties for driving without a valid license and also introduced penalties for driving without a valid certificate of third-party liability insurance coverage, which was made mandatory by law in 2018

How vehicle insurance premiums are determined is a commonly asked question. Although most consumers concur with the insurer’s fixed premium amount, they frequently don’t know how it was determined. Policyholders’ premiums for motor vehicle insurance policies are determined by a number of criteria, some of which are as follows:

  • incidental injury.
  • Own damage insurance
  • third-party insurance
  • Riders.

Third-Party Insurance

Because it shields the insurer from any liability resulting from accidents, third-party liability auto insurance is required in India. It should be noted, nevertheless, that this coverage does not cover maintenance expenses. As a result, choosing coverage that also covers damage to one’s own vehicle. Additionally, the Insurance Regulatory Authority of India’s definition of the motor vehicle’s capacity affects the premium that the policyholder must pay (IRDAI).

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Own Damage Insurance

The choice of own damage insurance coverage is advantageous to policyholders. The policyholder’s car may sustain damages from earthquakes, hurricanes, fires, and accidents, which are often not covered by the automobile insurance policy you purchase. To fully safeguard your car, make sure to get your Own Damage coverage.

Coverage for Personal Accidents

The portion of the insurance policy premium known as personal accident cover protects policyholders from accidents and other events that result in incapacity. Disability is a likely result of every traffic accident, so disability coverage is a crucial part of insurance plans. As a result, getting personal accident insurance is crucial for your protection. It should be remembered that as the amount insured increases, so does the price for this coverage.

Various Riders

Investors in insurance policies should also buy riders or add-on plans. The main benefit of choosing riders is that they contribute to the policyholder’s interests being protected without costing a lot of money. A common rider that policyholders choose is roadside help, which is useful especially when the policyholder is traveling in an unknown location. Another well-liked add-on is the no-claim incentive, which offers policyholders a sizable premium cut if no claims are filed for the duration of the policy year.

Cost Calculator

Calculating the required insurance premium is a problem that many insurance policyholders experience. However, one can utilize an online motor insurance calculator to make this work easier.

The following factors must be taken into account when using a calculator to determine the online motor insurance premium:

  • IDV.
  • Cubic volume.
  • Motor vehicle’s age.


When you purchase car insurance in India, the insurance provider will estimate the IDV, or insured declared value, of the vehicle. In the case of theft or an accident, this is the highest claim sum the insured may submit.

IDV rates fluctuate throughout time taking depreciation into account. Additionally, keep in mind that IDV is only applied to comprehensive insurance coverage.

Cubic Capacity

Engine size is expressed in cubic capacity or cc. In contrast to IDV, the engine’s size is constant, hence the rate for auto insurance is not impacted.

However, it should be remembered that automobiles with larger engines would cost more to insure. The Indian Motor Tariff Act establishes and governs the tariff rates.

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Vehicle’s age

Online auto insurance rate calculations heavily depend on the age of the car. The depreciation of a car increases with age.

Here is more information about automobile insurance coverage.

selecting an insurance provider

It can be difficult to choose an insurance company because there are so many of them. The following are the important considerations when choosing an insurance provider:

1. Licenses

Not every business has the necessary licenses to run in every state. Generally speaking, you should purchase from a business that has a license from your state since, in the event of a problem, you may count on the assistance of your state’s insurance department. Contact the state insurance department to learn more about the businesses that are authorized in your state.

2. Price

It truly pays to browse around because there are many companies that sell insurance policies and rates drastically differ from one to another. Obtain at least three pricing quotations from businesses, agents, and websites. Your state’s insurance department might release a price list that details what different plans cost from insurers in various regions of your state.

3. Financial Robustness

The financial robustness of a company is the degree to which it can meet its financial obligations and commitments. There are many ways to measure the financial robustness of a company.

This article discusses some of the most common metrics for measuring financial robustness, including liquidity ratios, solvency ratios, debt ratios, and profitability ratios.

Using ratings from independent rating organizations, choose a business that is likely to be solvent for many years.

4. Provider

The insurance company and its agents should respond to your inquiries in a timely manner. We will provide you with a list of businesses in your area so you can speak to other clients who have worked with that specific business or agency, and you can determine whether this is the case. To see if a corporation has any information on complaints, you could also want to look in a national claims database. Additionally, your state insurance authority will be able to inform you whether the insurance provider you’re considering working with has received a lot of negative feedback from customers.

5. Comfort

Whether you buy insurance online, over the phone, or from a local agent, you should feel satisfied with the decision. Make sure the agent or business will be simple to contact if you have a query or need to submit a claim.

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