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| How is premium calculated? |
Premium for private motor is calculated on the basis of following parameters :-
Insured Declared Value (IDV) of the vehicle: This is a function of current showroom price.
Cubic Capacity : Cubic capacity can be segregated in three slabs viz.
 | Less than 1000 cc |
| More than 1000 cc but less than 1500 cc |
| More than 1500 cc |
Geographical Zones : For the purpose of rating, India has been divided into the following zones depending on the location of the office of registration the vehicle.
| Zone A: Zone A includes Ahmedabad, Bangalore, Chennai, Hyderabad , Kolkata, Mumbai, New Delhi and Pune. |
| Zone B: It includes rest of India. |
Age of the Vehicle
| Not exceeding seven years |
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| What is IDV? |
The Insured Declared Value (IDV) is decided on the basis of manufacturers listed selling price of the brand and model of the vehicle. It is basically the depreciated value of the vehicle agreed upon by the insurer and the policyholder The IDV of the vehicle reduces with age. Click here to view the depreciation schedule for arriving at IDV.
However, if any electrical and /or electronic items are installed separately, which are not included in the manufacturer’s selling price, their IDV are decided independently at an extra cost. However, in case of a claim, the onus is on you to justify the higher IDV. IDV is to be fixed at the commencement of each policy period for the insured vehicle.
IDV of vehicles that are more than 5 years of age and of models that manufacturers have discontinued is to be determined on the basis of an understanding between the insurer and the insured. |
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| What is OD Premium? |
Own Damage (OD) premium is the cover over and above the mandatory third-party cover. Payment of OD premium entitles you to claim compensation in case of theft or damage of your vehicle due to fire, earthquake etc.
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| What are the discounts available under a motor insurance policy? |
Discounts available under a motor insurance policy are:-
| Voluntary deductibles |
| No Claim Bonus |
| Automobile Association Membership |
| ARAI approved Anti-theft device |
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| What is voluntary deductible option? |
Discount on the premium is available, if you opt for voluntary deductible option. Voluntary deductible is the minimum amount that you declare to bear at the time of claim. When you opt for a higher deductible, you are eligible for a higher discount. There is an inverse relationship between the deductible and the premium. When voluntary deductible increases, the amount of premium falls.
For E.g. if you have a voluntary deductible of Rs.2, 500 and there is a claim for Rs.8, 500. Then, the insurance company will pay you the difference of Rs.6000. For discount table, click here.
| Rs. 2,500: 20% on the OD premium, up to a maximum of Rs. 750/- |
| Rs. 5,000: 25% on the OD premium, up to a maximum of Rs. 1,500/- |
| Rs. 7,500: 30% on the OD premium, up to a maximum of Rs.2, 000 |
| Rs. 15,000: 35% on the OD premium, up to a maximum of Rs. 2,500/- |
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| What is No Claim Bonus? |
If you do not make a claim during the policy period, No Claim Bonus (NCB) is offered on renewals.
Insurers reward policyholders for not making claims by giving them a discount on the OD premium up to a maximum of 50%. However, it should be noted that NCB would be allowed provided the policy is renewed within 90 days of the expiry date of the previous policy.
Click here for NCB table.
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| Explain Automobile Association Membership discount? |
You can avail additional discount, if you are a recognised member of Automobile Association of India. You can avail 5% discount of the Own Damage premium subject to a maximum of Rs.200/- for a private car and a maximum of Rs.50/- for a two wheeler
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| Elaborate on discount on Anti-theft devices? |
In case you have installed ARAI (Automobile Research Association of India) approved anti-theft device in your vehicle, you can avail a discount of 2.5% on the OD Premium, up to a maximum of Rs 500. A discount is offered since an anti-theft device lowers the risk of theft. To avail discount, the anti-theft device has to be approved by the ARAI or any of the regional Automobile Association.
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| What are the kinds of add-on covers available under motor insurance? |
The following extra covers are available at an additional premium:-
| Electrical and electronic items |
| Cars with LPG / CNG fuel |
| Cars with Fibre Glass Fuel tank |
| For Compulsory PA cover |
Electrical and electronic items
Additional premium is charged in case of electrical fittings (fog lights or horns) and electronic items (stereos). These items can be insured at an additional premium @ 4% on the value of such fittings. The list of such items has to be declared by the proposal form.
Cars with LPG / CNG fuel
In case of vehicles fitted with bi-fuel system such as Petrol/ Diesel and CNG/ LPG, permitted by the concerned RTO, the CNG/LPG kit fitted to the vehicle is to be insured separately at an additional premium of 4% on the value of such kit. You need to specifically declare this in the proposal form
An additional premium of Rs. 60/- per vehicle is charged towards Third Party Liability Cover on account of CNG/ LPG system.
Fibre Glass Fuel tank
All policies covering vehicles fitted with fibre glass fuel tanks will attract an additional premium of Rs 50/- in the Own Damage section.
PA cover for paid driver and passengers
Additional premium is charged for paid driver and other unnamed passengers in your car. The maximum cover that can be availed under this section is Rs 1 lakh for a driver and Rs 2 lakh for each passenger. |
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