Vehicle Insurance Calculator

Calculate car and bike insurance premiums with NCB benefits, compare coverage options, and estimate IDV depreciation over time.

Your Insurance Estimate

Note: These are estimated premiums for planning purposes. Actual premiums may vary based on insurer, location, and specific vehicle details.

Premium and IDV Projection (6 Years)

What is Vehicle Insurance?

Vehicle insurance, also known as motor insurance, is a mandatory financial product in India that protects you against financial losses arising from accidents, theft, natural calamities, or third-party liabilities. Whether you own a car, bike, or commercial vehicle, having adequate insurance coverage is not just a legal requirement under the Motor Vehicles Act, 1988, but also a crucial financial safeguard.

Our advanced Vehicle Insurance Calculator helps you estimate annual premiums for your car or bike insurance, compare comprehensive vs third-party coverage, calculate No Claim Bonus (NCB) savings, and understand how your vehicle's Insured Declared Value (IDV) depreciates over time. This tool empowers you to make informed decisions about your motor insurance needs.

Types of Vehicle Insurance Coverage

Understanding the different types of vehicle insurance is essential for choosing the right coverage:

  • Third-Party Liability Insurance: This is the minimum legal requirement in India. It covers damages or injuries caused to third parties (people, property, or vehicles) due to your vehicle. However, it does not cover damage to your own vehicle.
  • Comprehensive Insurance: This provides complete protection including third-party liability plus own damage coverage. It covers theft, fire, natural calamities, accidents, and vandalism. Recommended for newer vehicles.
  • Own Damage (OD) Cover: This covers only damage to your vehicle, excluding third-party liabilities. Useful when you have a valid third-party policy but want additional protection.

Understanding IDV (Insured Declared Value)

The Insured Declared Value (IDV) is the maximum amount your insurer will pay if your vehicle is stolen or totally damaged beyond repair. It represents the current market value of your vehicle, calculated as:

IDV = Ex-Showroom Price - Depreciation

Depreciation rates set by IRDAI (Insurance Regulatory and Development Authority of India) are:

  • New Vehicle (less than 6 months): 5% depreciation
  • 6 months to 1 year: 15% depreciation
  • 1-2 years: 20% depreciation
  • 2-3 years: 30% depreciation
  • 3-4 years: 40% depreciation
  • 4-5 years: 50% depreciation

For vehicles older than 5 years, IDV is determined mutually between the insurer and vehicle owner based on the physical condition of the vehicle.

No Claim Bonus (NCB) Explained

No Claim Bonus (NCB) is a reward given by insurance companies to policyholders who do not make any claims during a policy year. It is a discount on your Own Damage (OD) premium that accumulates over consecutive claim-free years:

  • 1 year without claim: 20% discount on OD premium
  • 2 consecutive years: 25% discount
  • 3 consecutive years: 35% discount
  • 4 consecutive years: 45% discount
  • 5+ consecutive years: 50% discount (maximum)

Important: NCB belongs to the owner, not the vehicle. You can transfer your NCB when buying a new vehicle or switching insurers. However, making a claim resets your NCB to zero.

Essential Add-on Covers for Vehicle Insurance

Standard insurance policies have certain exclusions. Add-on covers provide additional protection:

  • Zero Depreciation Cover: Also called "Bumper-to-Bumper" cover, this eliminates depreciation deduction on parts during claims. Without this, you pay 30-50% of parts cost out-of-pocket. Highly recommended for vehicles up to 5 years old.
  • Engine Protection Cover: Protects against engine damage due to water ingression, oil leakage, or hydrostatic lock. Essential in flood-prone areas or during monsoons.
  • Roadside Assistance (RSA): Provides 24/7 emergency services including towing, flat tire change, battery jump-start, and fuel delivery. Peace of mind for long-distance travelers.
  • Personal Accident Cover: Mandatory cover of Rs. 15 lakhs for the owner-driver. Can be extended to passengers for additional premium.
  • Consumables Cover: Covers cost of consumables like engine oil, nuts, bolts, and washers used during repairs, which standard policies exclude.
  • Return to Invoice (RTI): In case of total loss, you get the full invoice value (including registration and road tax) instead of just IDV.
  • No Claim Bonus Protection: Allows you to make a limited number of claims (usually 1-2) without losing your accumulated NCB.

How Vehicle Insurance Premium is Calculated

Your vehicle insurance premium depends on several factors:

  • Vehicle's IDV: Higher IDV means higher Own Damage premium
  • Engine Capacity (CC): Third-party premiums are fixed based on cubic capacity slabs set by IRDAI
  • Vehicle Age: Older vehicles have lower IDV and hence lower OD premium
  • NCB Discount: Up to 50% discount on OD premium for claim-free years
  • Location: Metro cities may have slightly higher premiums due to higher risk
  • Add-on Covers: Each additional cover increases the premium
  • Voluntary Deductible: Opting for higher deductible reduces premium

Tips to Reduce Vehicle Insurance Premium

  1. Maintain Your NCB: Avoid claiming for minor damages to preserve your NCB discount
  2. Install Anti-Theft Devices: ARAI-approved devices can get you a discount
  3. Opt for Higher Voluntary Deductible: Reduces premium but increases out-of-pocket during claims
  4. Choose Appropriate IDV: Neither too high (expensive) nor too low (underinsured)
  5. Compare Multiple Insurers: Same coverage can have different premiums across companies
  6. Renew On Time: Avoid break in policy to preserve NCB and avoid reinspection
  7. Bundle Add-ons Wisely: Only select add-ons relevant to your usage pattern

Comprehensive vs Third-Party Insurance Comparison

Choosing between comprehensive and third-party insurance is a crucial decision:

  • Third-Party Only: Cheapest option, legally mandatory, covers only damages to others. Suitable for very old vehicles where repair costs exceed IDV.
  • Comprehensive: Complete protection for your vehicle plus third-party coverage. Recommended for vehicles under 8-10 years old.

For newer vehicles, the additional premium for comprehensive coverage is minimal compared to the protection it provides. As vehicles age, many owners switch to third-party only policies.

Making an Insurance Claim: Step-by-Step Process

  1. Report Immediately: Inform your insurer within 24-48 hours of the incident
  2. File FIR (if required): For theft, major accidents, or third-party injuries, file a police report
  3. Document Everything: Take photos of damage, collect witness details, and preserve evidence
  4. Visit Network Garage: Cashless claims are faster at insurer's network garages
  5. Submit Documents: Provide claim form, RC copy, DL copy, FIR copy (if applicable)
  6. Survey and Assessment: Insurer's surveyor assesses the damage
  7. Claim Settlement: Amount disbursed after deducting depreciation and deductibles

Common Exclusions in Vehicle Insurance

Standard vehicle insurance policies do not cover:

  • Normal wear and tear, mechanical breakdown, or electrical failure
  • Damage while driving under influence of alcohol or drugs
  • Driving without a valid license
  • Using vehicle for purposes not mentioned in policy (e.g., commercial use on private policy)
  • Consequential losses (loss of income due to accident)
  • War, nuclear risk, or acts of terrorism (unless specifically covered)
  • Depreciation on replaced parts (unless zero-dep cover is purchased)

Frequently Asked Questions

Is vehicle insurance mandatory in India?
Yes, third-party liability insurance is mandatory for all motor vehicles in India under the Motor Vehicles Act, 1988. Driving without valid insurance attracts a fine of Rs. 2,000 for the first offense and Rs. 4,000 for subsequent offenses. Additionally, you remain personally liable for any damages caused to third parties.
What happens if I don't renew my insurance on time?
If your policy lapses (not renewed within the grace period), you lose your accumulated NCB. Additionally, the insurer may require vehicle inspection before renewal. Most importantly, driving without insurance is illegal and leaves you financially exposed to any accidents during the uninsured period.
Can I transfer my NCB to a new vehicle?
Yes, NCB belongs to the vehicle owner, not the vehicle. When you sell your old vehicle and buy a new one, you can transfer your NCB to the new vehicle's policy. You need to provide proof of NCB (last policy copy or NCB certificate from previous insurer) when purchasing insurance for the new vehicle.
Should I opt for zero depreciation cover?
Zero depreciation (or nil depreciation) cover is highly recommended for vehicles up to 5 years old. Without it, during claims, the insurer deducts depreciation value of replaced parts (metal: 30-50%, rubber/plastic: 50%, fiberglass: 30%). This means you pay a significant amount out-of-pocket even with insurance. The additional premium for zero-dep is usually 15-20% of OD premium but can save lakhs during major claims.
What is the difference between IDV and market value?
IDV (Insured Declared Value) is the maximum amount the insurer will pay for total loss or theft of the vehicle. It's calculated as ex-showroom price minus IRDAI-specified depreciation. Market value, on the other hand, is what you might get if you sell the vehicle, which can be higher or lower than IDV depending on demand, condition, and accessories. Some insurers allow you to increase IDV by paying additional premium.
How does engine CC affect insurance premium?
Engine capacity directly affects your third-party insurance premium as per IRDAI regulations. Higher CC vehicles have higher TP premiums. For cars: up to 1000cc has lowest premium, 1000-1500cc is moderate, and above 1500cc is highest. For bikes: 75cc and below is cheapest, while above 350cc is most expensive. OD premium is more influenced by IDV than CC.

Related Calculators

Health Health Insurance Calculator Term Term Insurance Calculator EMI Car Loan EMI Calculator 🚗 Motor Insurance Calculator