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Vehicle Insurance Premium
Comprehensive premium = Own-Damage (% of IDV, scales with age) + Third-Party (IRDAI-fixed by engine cc) + GST. NCB discount applies on OD.
A: metros (Mumbai/Delhi/Bangalore...). B: tier-1 cities. C: tier-2/3.
How car insurance premium is built
A comprehensive policy = Own-Damage premium (a % of IDV that grows with vehicle age, depreciates IDV by 5–50%) + Third-Party premium (IRDAI-notified by engine cc: ₹2,094 for ≤1000cc, ₹3,416 for 1000–1500cc, ₹7,890 for >1500cc as of FY 2025-26) + 18% GST. No-Claim Bonus discounts of 20% / 25% / 35% / 45% / 50% apply on the OD portion only after 1, 2, 3, 4 and 5 claim-free years.
Worked example
A 3-year-old Maruti Swift (1197cc) with IDV ₹4.5 lakh in Mumbai, with 35% NCB: OD base ≈ 2.5% × ₹4.5 L = ₹11,250, less 35% NCB = ₹7,313. TP premium ₹3,416. Subtotal ₹10,729 + 18% GST = approximately ₹12,660. Adding zero-depreciation and engine protect riders typically pushes this to ₹16,000–18,000 — material for a car worth ₹5–6 lakh in resale.
When to use this
- Renewal time — sanity-check the quote your insurer or aggregator sends
- Switching insurers and carrying NCB across via the NCB Reserving Letter
- Deciding whether zero-dep is worth the 15–25% premium hike
- Buying a second-hand car and budgeting first-year cover separately
Also check the RTO road tax calculator and fuel trip cost for the full ownership picture.
FAQ
What is IDV?
Insured Declared Value — your car's current market value, used to compute OD premium and as the cap on payout. Insurer applies depreciation schedule (5% in year 1, 15% year 2, etc.).
Can I skip own-damage and just get third-party?
Legally yes — third-party is the only mandatory cover. But OD is what protects you against accident damage, theft, fire, flood. Skipping OD only makes sense for very old cars.
Premium drop with anti-theft device?
Yes — Anti-Theft Device discount of ~2.5% if device is ARAI-approved. Also, Automobile Association membership gives ~5% discount.