Insurance Guide: Know How To Calculate Your Car Insurance Premium

You Know how your car insurance Premium is calculated? You must have heard the terms Insured Declared Value i.e. IDV, No Claim Bonus i.e. NCB, Depreciation etc. many times. But do you know their meaning? If you do not know, then delvesoft team giving you complete information related to insurance today. View the slideshow below.

Here is the simple guide

We will give you such a simple guide so that you will be able to calculate the insurance of your vehicle easily.

There are two types of insurance

There are two types of insurance. First is own damage comprehensive cover and second is third party cover. The three key factors that the Own Damage Comprehensive Cover depends on are the location, the edge of the car and its engine capacity. Whereas third party cover only depends on the engine capacity of the car.

two types of insurance

To understand insurance in detail, let us take one year old Alto as an example.

If your Alto car is more than one year old and less than 2 years old, then the insured declared value applicable on it will be 80 per cent of the ex-showroom price of the car. If the ex-showroom price of the car is Rs 4 lakh, then 80 percent of it is Rs 3 lakh 20 thousand. click here

Now after this the premium will be calculated at the rate of 3.127 per cent. It will be charged at Rs 3 lakh 20 thousand. Accordingly, the amount that will be made will be 10 thousand rupees. click here

Now, it is time for the insurance premium. This differs from company to company. Many companies offer a discount of some percentage on the premium amount. Suppose a company is giving 50 percent discount, then 50 percent of the amount of 10 thousand rupees is 5 thousand rupees.

Now the next important step that happens is the No Claim Bonus. This lets you know how much money you have to pay for the insurance. If you did not claim for insurance in the previous year, then you get a discount of about 20 per cent in premium. This discount keeps on increasing in the coming years if you do not make an insurance claim.

Remember that we are talking about a car that is more than one year old and less than two years old. In this context, on the basis of 20 percent no claim bonus on 5 thousand rupees, one thousand rupees are made. In this sense, you get a rebate of 1 thousand rupees for the premium amount i.e. 5000 rupees & you have to pay 4000 rupees as premium.

The next stop is Third Party Premium. This is to recoup for the damage & loss of someone other than you. The amount of premium is decided according to the engine capacity of the car. It keeps on getting revised year after year. For cars with engine capacity of 1,000 to 1,500 cc, Rs 1,598 is charged as a premium. Whereas for vehicles above 1,500 cc, Rs 4,931 has to be paid. In such a situation, you will get Rs 1,468, which is for a vehicle more than 1 thousand cc engine, will be added to 4 thousand rupees. In this case, the total amount to be paid is Rs 5,468.

Now the last step remains. Personal accident cover and service tax are also included in the total amount of insurance premium. 100 rupees are added as personal accident cover. Whereas service tax of 14 per cent is levied. Now if we look at the total amount, then 14 percent of Rs 5,486 and Rs 100 will have to be added as accident cover. In such a situation, the total amount made is Rs 6,348.

So this was the method of insurance calculation. Hopefully now you will be able to calculate the insurance yourself easily.

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