How to calculate premium?

any1 can tell me how exactly premium is calculated??
i heard agents reduce the IDV value so that the premium is less and can b paid ??
suppose car is 3,00,000/- new car how much first year insurance will be??? and next year how to calculate
1st year i guess they depreciate 15% that becomes IDV value on that how much % becomes premium???

Ashish,

As per IRDA (Insurace Regulatory and Development Authority) the maximum IDV (Insured Declared Value) for a car can be 95% of its ex-showroom price. You can insure your car at this IDV before your car grows older than six months. Anyways, in most of the cases, this IDV is obtained when we insure an absolutely new car. As the car grows older, the IDV goes down. For a one year old car the IDV would be 85%. These guidelines are provided by IRDA for five years. Most of the insurers follow these guidelines. But since there is no guideline for sixth and abover years, people start reducing the IDV at their will. They call it 'we depreciate as per market value'.

There is a proper calculation for reaching the exact premium amount. Premium consists of OD (own damage) as per IRDA, third party liability, again as per IRDA, and service (or sales?) tax.

You can take a wild guess of the premium amount as 4% of IDV. So, a new car, worth 3 lakh will have IDV of 2.85 lakh and the approx premium would be around 11,400 rupees. However, most of insurers provide you discount. The discount is applicable only on OD part and may go up to 30% (you would be able to get 20% in most of the cases). So consider the premium to be in range of 8,500-10,000 rupees.

To know exact insurance premium, check out insurance premium calculator. Kindly note, it doesn't take discount into account.



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thanks a ton! your information is very helpful for my calculation....can u suggest any best company for getting insurance done?? all offer the same as what u said!(more or les) the same but any experience in claim??? which company does the claim faster?? i may go for that company? any idea?

Ashish,

ICICI Lombard, Bajaj Allianz and All India Assurance have very competitive quotes while Tata AIG and Iffco Tokyo are on higher side. I don't have any experience of claims (thank god! ) hence cannot help you here. FYI, my car is insured by Bajaj Allianz.



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Hi Banwari,

Just wanted to check that the exshowroom price for calculating IDV is the ex showroom price on the proforma invoice without minusing discounts like dealer discount, corporate discount etc? Also the values on the tax invoice is also very different from that on the proforma invoices.

Eg: On Proforma my ex showroom price = Rs 352145 Overall I received a cash discount of Rs 27000 on my wagonr. On the tax invoice the value is mentioned as 327823 inclusive of 12.5 % vat. However, the insurance company has calculated the IDV of the brand new vehecle as 307515. Now which value should I take for calulating the new IDV @ 85% after 1 year?

Hi Guys,

Any help on this one? Reqlly required a response urgently as I have to renew my insurance by Mar 17 2010. SOS.

Carman the best solution for your question can be answered from the dealers insurance executive. Every dealer has a special insurance person for all this things. You better contact them