Car Insurance Premium Calculator

A car insurance calculator is a simple online financial tool that helps people know the payable premium for getting a particular vehicle insurance policy. The premium is calculated based on the selected policy amount and the type of coverage.

With the driving insurance calculator, you can calculate the premium amount as many times as you want by entering different car insurance amounts to make an informed decision while fulfilling your other financial responsibilities at the same time.

With lots of car insurance providers in the market, it becomes quite difficult to opt for one and that’s when the car insurance premium calculator comes in to help you choose a vehicle insurance plan wisely.

Using the calculator helps you: - Compare premiums from different insurers - Choose the right coverage and add-ons, - Plan your budget more efficiently, and - Understand how factors like IDV, NCB, or location affect your cost.

NOTE: Use the calculator as many times as you like to find the most suitable and affordable insurance plan.

What Is the Formula Used to Calculate Car Insurance Premiums?

The car insurance calculator performs the calculation on your behalf and provides you with quick results. All you need to do is provide the correct information, choose the desired coverage amount and add-ons that you want to include in your insurance policy to get the maximum coverage.

Basically, the third-party premium rates are fixed by the IRDAI and to know the own damage premium amount, you can take the help of the calculator. The calculator, though, performs the complete tasks on behalf of the insured (potential), but even if you are looking for an auto insurance calculator formula, then take a quick look:

Car insurance premium = OD premium - (No Claim Bonus + Discounts) + Third-party liability premium + Add-ons (as fixed by the IRDAI)

How is Car Insurance Premium Calculated?

Calculating the car insurance premium is not rocket science and does not require any technical knowledge/specialization. The car insurance premium is calculated using a formula that the motor insurance calculator uses to perform the calculation for you.

All you need to do is provide a couple of simple details for easy calculation of the car insurance premium. Below, we have listed the sequential steps involved in calculating the premium for used and new cars using the car insurance calculator.

What Details Required for Calculating the Car Insurance Premium?

The details required for calculating the premium using the auto car insurance calculator vary depending on whether the car is new or used.

The following details will be required in each of the cases:

For New Car

• Car model, variant and make.
• Year of purchase, registration and manufacturer.
• Fuel type of the car - petrol, diesel, EV, etc.
• State of registration.
• Type of insurance coverage -third party, comprehensive, standalone OD, etc.
• IDV of the car.
• Personal details of the insured.

Old/used Car

• Car registration number.
• Vehicle’s age.
• Type of car - model and variant.
• Type of car insurance coverage -third party, comprehensive, standalone OD, etc.
• Details regarding the change of ownership, if any.
• Fuel type of the car - petrol, diesel, EV, etc.
• Previous claim reports.
• No Bonus Claim (NCB) (if any).

The calculation for the premium also varies depending on the use of the cars, which means the calculation for the used cars and new cars is different.

Which Key Factors Decide Your Car Insurance Premium Amount?

When calculating the car insurance premium, several factors influence the premium amount, regardless of whether the car is brand new or used. Some factors are controllable while others cannot be controlled.

Below, we have listed all the factors that impact a car insurance premium:

1. Car make and model: The first and foremost factor that affects the car insurance premium is the manufacturing year of the car and the model. The expensive cars or those with higher maintenance usually attract a high premium.
2. Age of the car: The age of the car is another important factor when determining the car insurance premium. The newer the car, the more the premium and vice versa. It is because of their high market value.
3. Fuel Type: The fuel type of your car affects the car insurance premium. CNG-fitted cars attract a higher premium when compared to petrol or diesel.
4. Geographical location: When choosing car insurance, location plays a vital role. In urban areas, the premium amount is usually high because of the higher risk involved.
5. Type of coverage: Another one is the type of car insurance coverage an individual is looking for - Third-party liability, comprehensive coverage or own damage car insurance policy.
6. No Claim Bonus (NCB): This factor usually affects the premium of old cars when renewing the insurance policy. In case of zero claims, the vehicle owner gets a certain percentage of discount, depending on the number of claim-free years. NCB can go up to 50% maximum in the case of 5 consecutive claim-free years.
7. Voluntary deductibles: This refers to the amount you agreed to pay out of your pocket, in case of an accident or damage to your car. Opting for higher deductibles lowers your overall premium.
8. IDV: Insured Declared Value (IDV) is the current market value of your car at the time of getting the car insurance. This is the maximum amount that an insurer can pay in case of theft or total loss of the vehicle.
9. Add-ons: Add-ons offer extra protection against a particular risk and every add-on has its own value that is added to the car insurance policy when chosen. The more the add-ons, the more the premium.
10. Anti-theft discount: Vehicles that opt for the ARAI Anti-theft discount attract a 2.5% saving on the car insurance premium.

What are the Best Tips to Lower Your Car Insurance premiums?

Car insurance premiums could seem burdensome if you are unaware of some smart tricks. Yes, some simple tips will help you enjoy a lower car insurance premium.

1. Compare car insurance policies: The smartest way to get the right car insurance is by comparing the available policies. By comparing different policies, you can easily opt for the right one with maximum coverage at an affordable premium.
2. Get vehicle insurance online: Prefer buying car insurance policy online. With this, you can easily check all the terms and conditions mentioned under the policy, not only at the time of buying, but anytime. It eliminates the chances of any hidden terms, providing transparency. Moreover, with the vehicle insurance calculator, you can easily determine the premium amount you are liable to pay.
3. Good driving record: Having a clean driving record helps individuals get car insurance at an affordable premium. It ensures that the risk involved in driving is pretty low, gaining the trust of the insurance providers.
4. Choose necessary add-ons: Selecting the add-ons is quite a challenging task. People often end up choosing unnecessary add-on that increases their premiums, thus paying heed when selecting the add-ons will help in making a wise decision and in turn saving some amount on premiums.
5. Prefer voluntary deductibles: Opting for deductibles will help you get car insurance at a lower premium. In addition to this, try to settle small claims on your own. Doing so will help you protect your NCB.
6. Get ARAI anti-theft devices: Cars having ARAI anti-theft devices installed in them attract lower premiums. By installing anti-theft devices, you cannot only enjoy a low premium but also secure your car from theft.
7. No Claim Bonus (NCB): No Claim Bonus is one of the great ways to pay a low premium. The more the claim-free years, the more the NCB. The NCB usually starts from 10% and goes up to 50% depending on the consecutive claim-free years.
8. Timely renewal of policy: Renewing your policy on time creates an image of responsibility, evades the chances of policy lapse and vehicle reinspection. It often secures you from a premium hike.
9. Regular vehicle maintenance: Periodic maintenance of the vehicle and driving the vehicle carefully lowers the chances of a vehicle breakdown, which in turn lowers the chances of a car insurance claim.
10. Avoid modifying the vehicle: Modifying your car might cost you an increased premium. Car lovers often modify their cars, which is one of the most common reasons for increased premiums.

What Are Third-Party Liability Premium Rates 2025?

In India, IRDAI is the regulatory body, which means that it is responsible for determining the premium rates for third-party liability. Third-party liability premiums vary depending on the fuel type of the vehicle, which means that the premium rates for EVs are different from those for petrol/diesel/CNG cars and other key factors.

What does Third-Party Liability Cover?

The third-party insurance is mandatory for every vehicle in India, as directed by IRDAI to cover:

• Bodily injuries, death, or disability (partial/total) of the third party.
• Any damage to the property of the third party.

The Third-Party Liability Premium Rates 2025

As of June 2025, the government planned to increase the third-party car insurance premium by 10% after the insurer companies requested to increase the premium amount from 5% - 15% in April this year, due to increased claims costs and court awards. Here are the third-party premium rates 2025 for fuel-based vehicles and EVs..

Fuel-based vehicles

Electric vehicles (EVs)

NOTE: The table represents the premium amount for the vehicle used for private purposes.

What factors determine the rate of ‘Third-party’ liability?

The third-party liability premium is determined by the IRDAI and the premium is fixed considering a couple of factors.

The factors that help in determining the premium rate include:

• Vehicle type: One of the vital factors includes the type of vehicle - sedan, coupe, hatchback, etc.
• Vehicle size: Another is the vehicle size. It directly affects the rate of premium, which means that a high engine or cubic capacity will result in a higher premium and vice versa.
• Purpose of the vehicle: Another one is the use or purpose of the vehicle, which means whether the vehicle is used for a commercial purpose or private.

An automobile insurance calculator is really a helpful tool that helps people secure their vehicle and manage their budget at the same time. It helps let you know the premium amount you are liable to pay by considering different insurance amounts, quickly and conveniently. Free to use, this tool saves time, effort, and money. Moreover, you can further save money by acting smartly and focusing on practicing the tips that help in lowering the premium amount.