Summary
Several websites offer car insurance calculators. These are simple, free-to-use tools that help you find out the premium that you will end up paying for your car. Here are some of the benefits of using these tools, ways to get the best coverage for your car, how to use the tool, and some of the parameters that determine the policy premium.
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Buying a car brings a lot of convenience to the table, right from the freedom to start your car and drive anywhere at any point in time to saving a considerable amount of time by not relying on public transport. And if you want to continue getting these benefits, it is essential that you maintain your car properly. It requires periodic servicing, replacement, or replenishing of consumables and, more importantly, securing it with car insurance.
Though buying a car insurance policy is mandatory, the benefits of having a policy are far higher than merely avoiding hefty traffic penalties. Car owners looking to buy a policy for their cars can benefit from the usage of a car insurance calculator.
What is a car insurance calculator?
A car insurance calculator is an online tool provided by several websites. This tool allows you to get an insurance quote for your car, by providing basic details. What makes the tool very interesting is that you can play around with different parameters and see how that impacts the premium in real time. For example, you could change the IDV of the car and visualise how it affects the car insurance premium.
What are the benefits of using a car insurance calculator?
Should you choose to take the help of an insurance calculator, here are some of the major benefits of the same.
- Using a calculator will save you a considerable amount of time. The time that one would have otherwise spent discussing and getting quotes from an insurance advisor or representative of a company.
- When you use a calculator, you can get quotes almost instantly without having to pay anything for them. It is a free-to-use tool.
- The most significant advantage is that it allows you to compare different policies. And choose a policy that meets your requirements and, at the same time, fits your budget as well.
- Since you only view the quotes, you do not have to rush to conclusions. Thus, you can take your time to decide on a policy.
- You can even make use of calculators to see the impact of riders on the policy. And choose a rider that would enhance the policy coverage.
- And more importantly, using calculators increases your knowledge about car insurance policies.
Using calculators to find the best coverage
Here are the steps that you will need to follow to use a car insurance calculator.
- Provide your car brand, model, variant, and fuel type
- Provide the location of your car’s registration
- Provide the year of purchase of your car
- Mention whether you have made any claims in the previous year
Once you enter the above details, the website will provide you with insurance quotes. Depending on the calculator that you are using, you might have to log in to the website.
The insurance quotes are usually for different types of policies, such as third-party liability, own damage policies, and comprehensive policies. Since you have the calculator at your disposal, you can view the premium for each policy type. Furthermore, you can add riders to a comprehensive policy and view the policy premium.
You even have the liberty to change the IDV or insured declared value of the car. It is the current market price of the car and the maximum amount that an insurer will compensate in the case of total loss. By keeping a higher IDV, you will end up paying a higher policy premium and vice versa. However, setting the IDV too low can have negative impacts on claims later on.
A calculator allows you to change all these parameters and display the premium accordingly. Thus, allowing you to pick a policy that offers the best coverage for your needs and know the premium beforehand.
Factors that determine the car insurance premium
Here are some of the factors that decide the premium of a car insurance policy.
- IDV
IDV is the current value of your car. In the event of a crash where the car cannot be repaired or is stolen, the insurer will compensate the car owner with IDV. Online calculators usually provide a range of IDV for your car, based on its age. You can choose anything from this range. A higher IDV would translate to a higher premium and vice versa.
- Fuel type
The type of fuel used alters the maintenance schedule and costs of a car. Thus, insurance providers offer different premiums for different fuel types. A vehicle that runs on petrol will more likely have a lower premium than a diesel or CNG-based car.
- No claim bonus
If you do not make any claims during the term of a policy, insurance providers offer you no claim bonus. The discount ranges from 20% for the first year and extends up to 50% for five consecutive years.
- Location of Registration
The location of the registration of your car also plays a role in deciding the policy premiums. For example, urban areas are known to have a higher population of cars and as a result a greater chance of accidents.
- Model of the car
Different variants of the same car can have a lot of differences. These could be from the feature list to even engine capacity and output. Thus, each model needs different coverage, and the premium changes likewise. A model with a higher market value is more likely to fetch a higher policy premium.
