A car insurance calculator is an online tool that can be used to calculate the premium of a car insurance policy as well as compare insurance quotes from various insurance companies. It helps a person buy the best possible insurance policy as per his/her requirements. A car insurance calculator not only helps a buyer get an appropriate plan but also helps in evaluating their insurance cost.
Importance of using car insurance calculator
Some of the main reasons to use a car insurance calculator are as follows:
- Ensures that you can select the best possible insurance
- Using car insurance calculator online can help in saving money
- Ability to compare insurance plans from top insurers
- Makes the overall process convenient and simple
- All prerequisite documents needed for a car insurance policy are kept in order
Factors that affect the insurance premium of a car
- Engine capacity: If the car has a higher engine capacity, the premium of the car insurance policy increases. The insurance premium on lower engine capacity cars are usually lesser.
- Location: The premium is higher if you live in an area where claim rates are high. Also, in urban areas where the traffic density is high, the premium of the insurance is higher in comparison to suburban areas.
- Insured Declared Value (IDV): A new car’s IDV will always be maximum, but gradually lowers because of depreciation.
- Year the car was manufactured: The IDV is lesser for older cars. The lower the IDV, the lower the premium.
- No Claim Bonus (NCB): For every claim-free year, the insured gets offered NCB. It is a cumulative discount and can be transferred from one car to another.
- Type of fuel used: Compressed Natural Gas (CNG) fitted cars usually have a higher premium than petrol and diesel cars.
- Anti-theft discount: If the car is fitted with an Automotive Research Association of India (ARAI) approved anti-theft device, a discount of 2.5% is offered on the premium.
- Car details: High-end cars have a higher premium than low-end or budget cars. Similarly, family cars have a lower insurance premium than SUVs.
- Voluntary Deductible: If you opt to pay a higher voluntary deductible, the lower the insurance premium will be. Voluntary deductible is the minimum amount that is paid by you at the time of a claim.
- Discounts: Additional discounts are usually offered for doctors, government employees, and defence personnel.
- Demographic factors: Age, marital status, and gender can also determine the premium of the car insurance. For instance, insurance premium is usually lower for middle-aged drivers when compared to young and old drivers.
- Coverage: A customer can either opt for a Comprehensive Insurance or a Third-Party Insurance policy. Depending on the type of insurance he or she opts for, the insurance premium can vary.
- Add-on covers: Add-ons covers help in saving money during the time of a claim. If used smartly, it can help you at the time of need even though it may increase the premium of the car insurance.
How is Car Insurance Calculator used?
It is an online tool that helps in calculating the car insurance premium based on the information provided by the customer.
Customers are provided with different premium rates as per their requirements by using a car insurance calculator. Car details, date of registration, extra coverage details, and start date of the policy will have to be mentioned by the customer in order to get a quote. To get the best deal when buying a car insurance policy, it is always better to compare quotes.
Calculation of car insurance premium is different for every company.
- Calculating premium for new cars: The manufacturer of the vehicle, the year the vehicle was manufactured, the state where the car is registered, and the model of the car are some of the details required when calculating the premium of a new car. The details of the owner are also very important. Based on these details, the premium that must be paid for the insurance policy is calculated by the car insurance calculator.
- Calculating premium for old cars: Type of car, existing car policy details, past claims made on the policy, fuel type, and registration number of the car are the details that must be filled when calculating the premium of a used car. The car insurance calculator can be used to calculate the premium of the car insurance policy only once these details are entered.
How is premium calculated for new and old cars?
Some of the components needed for calculating premiums of new and old cars are:
- Fuel type
- Engine capacity of the car
- If there is any accumulated NCB
- Voluntary deductibles
- Age and type of car
- Place where the car is registered
- Owner’s age, gender, and occupation
- Policy start date
For used cars:
- Details of current insurance policy
- Details of the previous owner
- Claim history
Benefits of using a car insurance calculator
There could be a lot of confusion when buying a car insurance policy due to the availability of so many options. Some of the benefits of using a car insurance calculator are listed below:
- Saves a lot of time as manual calculations are avoided.
- Relevant documents are kept in order at all times as the tool requires relevant information.
- There is no involvement of middlemen or agents, therefore, you can choose the right policy as per your needs.
- The tool can be accessed from your home or at work, therefore, there is no need to speak to agents.
- The tool also offers options to change variables and see the difference it makes in the overall insurance premium.
- Apart from the price, various other factors are also highlighted by using the tool.
- The owner can be aware of all the options available to him or her.
- It is a convenient, hassle-free, and reliable way of buying a car insurance policy as per your needs.
Therefore, using a car insurance calculator when buying an insurance policy has many benefits. The tool is very easy to use and gives various quotes from many insurance companies. This way a customer will be able to buy an insurance policy as per his/her requirements from a reputable company.