The average cost of car insurance in India can significantly fluctuate and is highly influenced by elements like the type of vehicle, location of the policyholder, age, driving record along with chosen coverage level.
On an average, the annual cost for a mid-range Sedan with third-party liability coverage may commence at around INR 5,000 to INR 7,000. Meantime, comprehensive coverage for the same Sedan could span from INR 10,000 to INR 20,000 or even higher.
Let’s understand what the average cost of car insurance in India looks like.
Average Cost of Car Insurance by Company
The typical premium annually for auto insurance in India may be between INR 10,000 and INR 20,000 or even higher. However, it is essential to get customized quotations by considering variables like vehicle type, age, location and driving history from these insurers, to find accurate average cost for insurance companies.
It is crucial to find the best economical coverage for your needs and by comparing quotes from several insurance companies you can do that. Let us see a few companies with their comprehensive rates.
Factors Affecting Average Car Insurance Cost in India
The Motor Vehicle Act of 1988 has made it necessary to take auto insurance plans in India. The latest modification to this Act is that it fines vehicle owners for not having basic third-party liability (TPL) coverage. This has led to a rise in auto insurance policy sales in India.
Regardless of how long you’ve owned your car, you need to have specific insurance coverage for it. Even though it is legal, it necessarily does not have to break the bank to cover your car. While it could seem appealing to reduce your auto insurance rate, it is important to keep in mind the different factors that could make you end up paying more than you should. Let us understand the factors deeply.
Vehicle Type
The manufacturer’s name and the vehicle model are associated with a specific label on the vehicle related to its brand. Along with the variant and version, the label is the identification of the car. Every variant will have a varied insurance rate even for the same automobile model from the same manufacturer. This happens because every variation is uniquely created and will cost you more to replace than its spare parts.
The insurance cost of a car with advanced specifications and features will go up because these cars are highly expensive and to fix them and get replacement components are hard. In unannounced events like an accident or damage, the insurance provider will cover the extra cost in the form of higher premiums for the replacement and repair of certain parts.
Average Car Insurance Cost By Vehicle Type
Age and Gender
When it comes to auto insurance, getting coverage with your own self or with your parents can be significantly different. According to our most recent data, auto insurance costs increase significantly when you increase the drive time. Adding a new and young driver to your vehicle insurance policy might be convenient. As an insurance holder, you should weigh the advantages and drawbacks before making a choice.
Research also indicates that female drivers get auto insurance at a lower rate than male drivers. The gender difference in rates becomes negligible as drivers age and accumulate more driving expertise. In some age groups, men pay a little lower than women, but around the age of 35, typical premium rates are the same for both of them.
Average Cost of Car Insurance By Age (7)
Average Car Insurance Cost By Gender (1)
Region
The region is an important factor in determining premium claims in various zones. As most of you are aware Zone A cities are the busiest in the country and urban in nature with high population density. In other words, there are more cars on the road which raises the possibility of collisions. Therefore, insurance companies demand higher premiums to offset the risk. Your engine capacity and age of your car both play a high role in setting the premiums.
Average Car Insurance Cost By Region⁽⁴⁾
The Insurance Regulatory and Development Authority of India (IRDAI) is the regulatory agency that oversees all insurance-related matters. Zone A cities include Bengaluru, Mumbai, Chennai, New Delhi, Pune, Hyderabad, Ahmedabad and Kolkata and the remaining cities fall under the Zone B category. The premium for the coverage differs based on the registered zone of the car.
Car Insurance Premium Calculation for Zone A Cities
Zone A Calculation
Zone B Calculation
IDV stands for your car’s insured declared value in the tables above. The IDV represents the car’s current market value. You can experiment with the car’s IDV while getting auto insurance online. A higher IDV would guarantee you a larger payout if your car is completely destroyed. Conversely, the premium will go up. A lower IDV would mean a cheaper premium, but you might need to pay for repairs from your pocket.
Fuel Type
Getting a car is still under budget but the diesel engine makes it more expensive. Thus, insurance firms generally charge a greater premium for cars with diesel engines compared to petrol. Also, this applies to luxury vehicles with expensive replacement parts.
Average Car Insurance Cost By Vehicle Cubic Capacity cc⁽⁹⁾
Average Cost of Car Insurance By Fuel Type⁽⁹⁾
Fuel type – Petrol
Fuel type – Diesel
Fuel type – Electric
Bottom Line
It is very important that you understand that premium in India is a complex mix of interrelated criteria as you navigate the world of auto insurance rates. As you know, a variety of factors determine your premier rates, including the kind of vehicle you drive, location, age, driver’s profile, add-ons, NCB, deductibles, miles, safety features, use and past claims.
Forbes Advisor India has compiled the average cost of car insurance and the factors that determine it. Looking at this data, you may make wise choices that suit your tastes, requirements and financial objectives. You can potentially lower your auto insurance price by sensibly driving and maintaining a spotless record of claims.
Source:
- https://www.policybachat.com/articles/average-car-insurance-costs
- https://www.insurancedekho.com/car-insurance/news/how-your-car-types-affect-your-car-insurance-premium.htm#popup
- https://www.hdfcergo.com/blogs/car-insurance/car-insurance-why-age-and-gender-matters#:~:text=When%20you%20reach%20the%20age,rates%20beginning%20at%20age%2075.
- https://www.hdfcergo.com/blogs/car-insurance/impact-of-different-regions-on-car-insurance-policy-premium#:~:text=Car%20Insurance%20Zones&text=Depending%20on%20the%20car’s%20registered,other%20cities%20in%20the%20country
- https://www.icicilombard.com/blogs/car-insurance/mb/petrol-vs.-diesel-how-car-fuel-affects-your-car-insurance-premium#:~:text=Typically%2C%20a%20car%20with%20a,cars%20with%20expensive%20spare%20parts.
- https://www.bankbazaar.com/insurance/car-insurance-calculator.html
- https://www.policybachat.com/articles/car-insurance-prices-by-age
- https://dgnote.com/our-blogs/factors-affecting-car-insurance-premiums-in-india-what-you-should-know
- https://www.godigit.com/motor-insurance/car-insurance/how-fuel-type-impacts-car-insurance-premium
