Same Insurer Quoting Different Rates for the Same Car? Read on

Amit and Rohan have been childhood friends and undertook all major life decisions collectively. From going to school and then college together to sharing investment and insurance plans, both friends ensured they walked down the same path. Being of the same age with similar family commitments and with a similar income group, Amit and Rohan made sure they were on the same page when it came to financial decisions. Both the friends were however pleasantly surprised when they got different car insurance quotes even when they bought a same car model on the same date.

Insurers take into account various parameters when offering car insurance quotes. So if you have been wondering why car insurance rates vary, read on to know various factors impacting your automobile insurance premium.

Geographical Location
Your car premium is linked to your geographical location. Rohan and Amit overlooked the fact that they both lived in different cities and hence the difference in car premiums. IRDA, the insurance regulator has shortlisted two zones after evaluating the possible risks for car owners. Zone ‘A’ has cities of Mumbai, New Delhi, Bangalore, Chennai, Kolkata Ahmedabad, Hyderabad and Pune while all the remaining cities and towns fall under Zone ‘B’. So if you are residing in a Zone ‘A’ city, your car insurance premium would be slightly higher than those living in any Zone ‘B’ city or town.

The age of the vehicle
A new car means a higher risk for the insurance company hence the premium charges for a new car is higher than older car. With time as the car becomes old the total value of the car depreciates thereby reducing the risk of the insurance company. The insurer therefore passes on the benefit to the automobile owner with a drop in car insurance premium charges. your parents and in-laws in a family floater plan, you may not always be able to do so as most family floater plans cater to the needs of the individual, spouse and kids.

Cubic Capacity of the automobile
The cubic capacity of your car's engine has a direct correlation with the insurance premium. The insurance regulator Insurance Regulatory and Development Authority of India (IRDA) approves third party insurance rates as per the cubic capacity of the engine of the automobile. The third party insurance rates for FY 2017-18 are as follows.

• Cars less than 1000 CC: Rs. 2055
• Cars exceeding 1000 CC but not exceeding 1500 CC: Rs. 2863
• Cars exceeding 1500 CC: Rs. 7890

Insured declared value of the vehicle
IDV or Insured Declared Value is the maximum amount that you can claim under a motor insurance policy. The final insurance premium is directly correlated to the risk as per the IDV of the vehicle. Depreciation percentage to calculate IDV is as fixed by IRDA as listed.

Age of Car	Depreciation Percentage to calculate IDV
Age less than 6 months	5%
6 months to 1 year	15%
1 year to 2 years	20%
2-3 years	30%
3-4 years	40%
4-5 years	50%

NCB
If you already have car insurance, not seeking any claim in previous year can offer you a no claim bonus or NCB which can go as high as 50% effectively bring down your car insurance premium substantially. NCB is all the more reason for you to drive safe and ensure no insurance claims.

Insurance add-ons
You can opt for various car insurance add-ons like zero depreciation, engine protector, return to invoice, tyre damage etc to make your car insurance more comprehensive. With every add-on you opt for, your overall insurance premium increases accordingly.

Other miscellaneous factors
If you are a sensible driver, you are more likely to drive safely thereby reducing risks of any accidental damage. To reward the good drivers, insurers offer discounts for members of well known Automobile Association or clubs. Additionally use of LPG/CNG kits, anti theft mechanisms etc also ensure the final premium rates for your car insurance are lower than those without having any such parameter.

Conclusion: Car insurance premiums may vary from insurer to insurer as there are various underlying factors that insurers use to reach a final premium cost. Compare car insurance before choosing the right deal is therefore an essential aspect of seeking car insurance.