There are many factors which go into determining the premium which includes the vehicle’s model, cubic capacity, age, etc. Also, for the same vehicle with similar cubic capacity (CC), an insurer can charge two varying amounts as premium. This is because location is one of the many factors, depending on which the premium amount is calculated. Let’s learn more.
Premium depends on geographical locationNote that the premium you pay for your motor insurance is influenced by the geographical location and is charged as a percentage of the insured declared value (IDV). IDV is the vehicle’s market value.
Considering your geographical location and the corresponding possibility of vehicle loss or damage, insurers calculate the premium amount. Thus, motor insurance premiums are higher in regions that are more susceptible to accidents, thefts and vandalism.
Two insurance zones in IndiaIn India, there are two insurance zones – Zone A and Zone B. Zone A consists of eight cities including New Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Zone B comprises rest of India.
Motor insurance premium is higher in the eight cities belonging to Zone A. This is because these cities have a higher population and heavy traffic, thus exposing your vehicle to more risks.
Motor insurance rates for different zonesThe table given below outlines the motor insurance rates for the aforementioned zones based on the vehicle’s age and engine capacity:
Premium rates for Zone A
|Age of the vehicle||Less than 1000 CC||Between 1000 - 1500 CC||Above 1500 CC|
|Less than 5 years||3.127% of the IDV||3.283% of the IDV||3.440% of the IDV|
|5 to 10 years old||3.283% of the IDV||3.447% of the IDV||3.612% of the IDV|
|Above 10 years||3.362% of the IDV||3.529% of the IDV||3.698% of the IDV|
Premium rates for Zone B
|Age of the vehicle||Less than 1000 CC||1000 - 1500 CC||Above 1500 CC|
|Less than 5 years||3.039% of the IDV||3.191% of the IDV||3.343% of the IDV|
|5 to 10 years old||3.191% of the IDV||3.351% of the IDV||3.510% of the IDV|
|Above 10 years||3.267% of the IDV||3.430% of the IDV||3.596% of the IDV|
So, the next time you switch cities, note that your motor insurance premium may also see a change.
Click here to apply for a motor insurance.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
Disadvantages of Early Retirement - What Happens When You're Not Working?
Early retirement seems to be good, many people enjoy life without working especially with extra earnings. But they are not aware about the cons. Lets explore the disadvantages of retiring early to save your retirement life.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.