How to Calculate Car Insurance Premium in India
In simple words, the insurance premium is an amount of money you pay periodically to the insurance company against the contract of the policy. Now, you must be thinking “what is the contract? And why do you pay?”, Right? So generally, according to the agreement in a car insurance policy, the insurer guarantees to take care of your bills incurred from any repair done to your car, only if you have successfully paid the decided premium in the decided time interval. Keep in mind that the terms of the coverage will be mentioned in the policy contract.
If you own a car, there are always chances that you take the car to the garage. No doubt, the garage will hand over a heavy bill at the end of the process, so the insurance company will clear that bill as a return favour to your timely premium payment. And the amount of the premium depends on numerous factors.
What are the factors that affect the Car Insurance Premium?
A car insurance premium is affected by different factors like:
Components of a Car Insurance Premium
The car insurance premium is the amount of money you will pay the insurer in place of buying a policy from them. A Car Insurance premium is computed based on different factors that affect it directly. It is also based on the types of cover you would want to choose. So, you may understand that car insurance will have premium charged for:
Example of Car Insurance Premium calculation
Let us see how Digit Insurance will calculate the premium for the car you purchased today. Think you bought a New Maruti Alto 1.1 LXI Petrol version with airbags for Rs.276675/- .
Own Damage Premium
Third Party Premium
Zero Dep Cover (add-on)
Engine Protection and Gearbox Protection (add-on)
Consumable Cover (add-on)
Personal Accident Cover
Additional Discount on OD Premium
A Car Insurance Policy is your need to prevent undue financial liabilities that may shake your savings. Getting a renewal of the policy is as important as buying a car policy for a new vehicle.