Calculating car insurance premiums involves several factors, and understanding the process is essential to comprehend how the final figure is derived. The premium isn't merely a number; it's a result of various considerations. Here's how it's calculated:
Vehicle's Parameters: The premium is influenced by your vehicle's type, age, Insured Declared Value (IDV), engine capacity, and the region where it's registered.
Third-Party Insurance: The Insurance Regulatory and Development Authority of India (IRDAI) sets the rates for third-party car insurance premiums. As of June 2022:
- Cars with Engine Capacity:
- Less than 1000 cc: ₹2,094
- Between 1000 cc to 1500 cc: ₹3,416
- More than 1500 cc: ₹7,897
- Cars with Engine Capacity:
Own-Damage Premium Calculation:
- Formula: Own-Damage Premium = IDV x [Premium Rate (set by insurer)] + [Add-Ons] - [Discounts and Benefits Acquired]
Comprehensive Insurance Premium Calculation:
- Formula: Comprehensive Car Insurance Premium = Third-Party Premium + Own-Damage Premium - Any Discounts and Benefits Acquired
Understanding these formulas and the factors impacting them helps in comprehending how your car insurance premium is calculated. It's crucial to assess these aspects when evaluating insurance options to make informed decisions regarding coverage.
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