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Car Insurance Premium At A Glance

Car Insurance is mandatory in India. Certain factors that govern the car insurance premium include the car cubic capacity, model of the car, area of travel, and value of car nominated for insurance. The insurance company investigates details such as engine power, luxury car accessories, and parts when the proposed car is a premium sedan or a luxury car. The premium will be fixed depending on the usage of the car as well, which is the mileage/km that the car has covered.

For used cars, insurance companies cover up to 75 percent of the car value or the second-hand value of the car in the local market, whichever option is less. So, those who go for used cars usually end up with lesser insurance amount than a new car owner. Most certified used car marts like Hyundai ‘U trust’, Maruti True Value, and Automart India have tie-ups with insurance companies. They provide insurance before the car rolls out on to the street.

In the event of a used car sale, the insurance policy has to be transferred to the new owner within 14 days of the date of sale. In case there is a no claim bonus on your car and you plan to sell your car, you have to intimate the insurance company. The no-claim bonus will be transferred to the account of your new car, if you purchase another car within three years.

For new cars, the tariffs are the same across all four public sector general insurance companies. They are governed by the laws of India. However, there are several private players like Kotak Mahindra, Bajaj Allianz, ICICI Lombard, and others. These companies have their own individual system of tariffs or premiums. Some have insurance policy that is valid for one year only. The insurance policy has to be renewed within the period of the existing policy or else the liability falls on the car owner for any damages caused during this period.

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