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Car Insurance Premium Calculator
A car insurance premium calculator is an online tool that estimates your policy cost based on your car details, location, and coverage choices. It allows you to adjust IDV, add-ons, and deductibles to see how your premium changes. In India, your premium is calculated using own damage cost, third-party charges (fixed as per regulations), and optional covers. Before buying, always check IDV, add-ons, claim history, and exclusions to avoid underinsurance or overpaying.
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What is Car Insurance Premium Calculator?
A car insurance premium calculator is an online tool that calculates your car insurance cost based on inputs such as your car’s details, location, policy type, and claim history. It also allows you to customise IDV, add-ons, and deductibles to see real-time changes in your premium, helping you make better decisions before buying.
How to use the Car Insurance Premium Calculator?
Here is the formula to calculate car insurance premium: Car Insurance Premium = Own Damage Premium - (NCB + Discounts) + Third-party Liability Premium. However, if you want an easier way out, you can use the IDV calculator for car online by Digit and get the right insurance for your car!
Step 1
Enter your car’s Make, Model, Variant, Registration Date, and City
Step 2
Click ‘Get Quote’ and choose your plan
Step 3
Select between Third-Party or Comprehensive cover
Step 4
Enter previous policy details (expiry, claims, NCB)
Step 5
View your premium instantly
Step 6
Adjust IDV and select add-ons (Zero Dep, Engine Cover, etc.)
Step 7
Check your final premium with customisations
Pro Tip: Do not just check the premium once, adjust IDV, add-ons, and deductibles to understand what is increasing your cost and optimise it accordingly.
What Information is Required to Calculate a Car Insurance Premium?
To get an accurate premium estimate, you need a few key details related to your car and coverage preferences:
- Car Details: Make, model, variant, age, fuel type, and engine capacity help insurers assess repair costs and risk.
- Car Value (IDV): Your car’s current market value determines how much coverage you get and directly impacts the premium.
- Registration Location: The city or PIN code affects premium as risk differs across traffic, theft, and accident-prone areas.
- Purchase & Registration Year : Helps calculate depreciation and your car’s current insured value.
- Existing Policy Details: For renewals, details like insurer name, policy type, and expiry date are required.
- No Claim Bonus (NCB): Your claim-free history gives you a discount, reducing your premium.
- Policy Type: Choosing between third-party and comprehensive cover changes the level of protection and cost.
- Add-ons & Deductibles: Optional covers and voluntary deductible choices help customise your coverage and premium.
How is Car Insurance Premium Calculated in India?
You can easily calculate your car insurance premium by using the formula below:
Car Insurance Premium = Own Damage Premium - (NCB + discounts) + Third-Party Liability Premium + Addons + GST
Disclaimer: Values are based on current car prices and standard rates. Actual premiums may vary by insurer, city, and selected add-ons.
How to Calculate Car Insurance Premium for New Cars?
For a new car, your insurance premium is calculated by combining mandatory third party coverage with optional own damage protection and add ons based on your needs.
Premium Formula
Total Comprehensive Premium = Own Damage Premium − Discounts + Third Party Premium + Add on Costs
How to Calculate Car Insurance Premium for an Old Car?
For an old car, the insurance premium is mainly based on its current market value (IDV), claim history, and the coverage you choose.
Own Damage (OD) Premium
This covers damage to your car and is calculated based on its current market value.
OD Premium = (IDV × Insurer’s Rate) + Add ons − NCB
IDV (Insured Declared Value): The current value of your car after depreciation, which decreases as the car gets older.
NCB (No Claim Bonus): A discount for claim free years that reduces your premium.
Add ons: Optional covers that increase premium but improve protection.
Third Party Premium
This is mandatory and covers damage or injury caused to others, with rates fixed based on your car’s engine capacity, not its age.
Final Premium Calculation
Once both components are calculated:
Total Premium = Own Damage Premium + Third Party Premium + Add ons + GST
What are the Factors that Affect Car Insurance Premium Calculation?
IDV(Insured Declared Value)
The IDV represents your car’s current market value. A higher IDV increases your premium but ensures a better payout if your car is stolen or declared a total loss.
Car age
As your car gets older, its value depreciates. This reduces the premium, but it also lowers the maximum claim amount you can receive.
Location of registration
Premiums tend to be higher in metro cities or areas with dense traffic, higher accident rates, or increased risk of theft.
Driving and claim history
Insurers evaluate your past claims. Frequent claims signal higher risk, which can lead to an increase in your renewal premium.
No Claim Bonus (NCB)
If you haven’t made any claims during your policy term, you earn an NCB. This can significantly reduce your premium over consecutive claim-free years.
Type of policy
A comprehensive policy costs more than third-party insurance because it covers both own damage and third-party liabilities.
Add-on covers
Optional add-ons like zero depreciation, engine protection, or roadside assistance increase your premium but also enhance your overall coverage.
Deductibles
Choosing a higher deductible reduces your premium, but it means you will bear a higher cost out of pocket when making a claim.
Why Choosing the Right IDV Matters in Car Insurance?
Setting the correct Insured Declared Value (IDV) is crucial because it directly impacts both your premium and the amount you receive during a claim. An incorrect IDV can either make you overpay or leave you underinsured.
If your IDV is too high: You end up paying a higher premium, but the extra cost does not translate into additional real benefit, since insurers will only settle claims based on the car’s actual market value.
If your IDV is too low: Your premium may be lower, but in case of theft or total loss, you will receive a reduced claim amount, which may not be enough to replace your car.
Choosing the right IDV means aligning it closely with your car’s current market value. This helps you avoid unnecessary premium costs while ensuring that your financial protection remains adequate in case of a major loss.
What are the Benefits of Using a Car Insurance
A car insurance calculator helps you instantly estimate premiums, customise coverage, and make informed decisions without guesswork.
Accurate IDV Selection: Lets you adjust your car’s IDV to match its current market value, ensuring you get the right payout in case of total loss or theft.
Better Add-on Selection: Allows you to try different add-ons and instantly see their impact on premium, helping you choose only what you truly need. With the car insurance premium calculator, you can add different car insurance addons and check the increase in premium and then choose the right mix of add-ons.
Compare Premiums Easily: Helps you check and compare multiple premium options to find the best coverage at a competitive price.
Complete Cost Transparency: Shows a clear premium breakup so you understand exactly what you are paying for, with no hidden charges.
Instant Premium Estimates: Generates quick and accurate premium quotes within seconds without lengthy calculations.
Improved Financial Planning: Gives you visibility into costs, helping you plan your budget and avoid overpaying for unnecessary coverage.
Full Control Over Policy: Allows you to customise coverage, IDV, deductibles, and add-ons without depending on agents or intermediaries.
Best use case: A car insurance calculator helps you compare plans and optimise your premium instantly by adjusting IDV, add-ons, and deductibles.
Tips to Reduce your Car Insurance Premium
You can lower your car insurance premium by making smart choices around coverage, driving habits, and policy customisation.
Long Term Third-Party Liability Premium Rates (3-Yr Policy)
Long-term third-party liability premium rates (3-year policy) vary based on the car's engine capacity. Here are approximate premium rates for a 3-year policy:
Third Party Car Insurance Premium Rates in India
A Third-Party Car Insurance Premium Calculator depends on your car’s engine cc and the respective premium rates are predetermined by the IRDAI, which are as follows:
Third-Party Electric Car Insurance Rates
Here are the third-party electric car insurance rates:
Why is it important to use Car Insurance Calculator?
Confused whether you should blindly go for any car insurance premium or calculate car insurance premium on your own and make an informed decision? Here's why you should go for the latter and use a car insurance calculator in India for the same.
How to Buy Car Insurance Policy Online with Digit?
Fill Car Details
On the Digit App or website, enter car registration number and select the policy status.
Select a Plan
Select the type of car insurance policy and choose desired add-ons.
Enter Your Personal Details
Enter your personal, nominee and vehicle details, and move to the next step.
Make Payment & Complete KYC
Complete the payment and mandatory KYC verification process.
That's It!
You’ll receive the policy document via email, SMS and WhatsApp. Also, you can access it 24X7 on the Digit App.
FAQs about Car Insurance Calculator
What is the importance of a car insurance premium calculator?
Car insurance calculator is important as it helps calculate the car insurance premium easily and quickly.
Where can I get a car insurance premium calculator?
You can find IDV calculator for your car online on Digit website or app. To use it, you just need to provide your car’s basic details and previous policy details to get your car insurance premium quote.
Is car insurance premium higher for new or old car?
New car insurance premium is usually higher than those for older cars because the Insured Declared Value (IDV) of a new car is higher, making it more expensive to insure. However, several other factors affect the car insurance premium, so you can use the new car insurance calculator to estimate the premium price.
Which insurance is the best for a new car?
For a new car, it is best to get a comprehensive car insurance policy as it covers both third-party liabilities and any damage to your own car from unforeseen events.
Can I use the car insurance premium calculator while renewing my policy?
Yes, you can use the IDV calculator for car to renew your car insurance, no matter if you’ve bought your previous policy with a different insurer.
Does IDV affect car insurance premium?
Yes, a higher IDV increases the premium while lowering it reduces both premium and claim payout.
Can I reduce premium without reducing coverage?
Yes, by increasing deductible or removing unnecessary add-ons.
What happens if I choose the wrong IDV?
You may either overpay or receive a lower claim amount.
Does NCB reduce premium every year?
Yes, if you do not make a claim, your NCB increases and reduces your premium over time.
Can I use the calculator for renewal?
Yes, car insurance premium calculator works for both new purchases and renewals.
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Mayur specializes in motor insurance and is responsible for overseeing the development and management of motor insurance products. With expertise in product strategy and market analysis, he focuses on developing customer-centric insurance solutions.