Does Car Insurance Premium Change According To Different Regions In India?

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Updated: Mar 8, 2024, 5:22pm

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The car insurance premium is one of the most vital factors that is considered while purchasing a car insurance policy. The insurance companies arrive at this rate by taking a lot of factors into consideration, which directly or indirectly affects the car insurance premium rates.

For example, from your age, to your car’s model, its cubic capacity, vehicle’s age, have a huge impact on your car premium rates. Similarly, your place of residence and your car’s registered location also have a significant influence on the premium that you have to pay for receiving the car insurance coverage.

So, yes, the car insurance rates vary from state to state, often by a few hundreds or at times even thousands of rupees.

Understanding Car Insurance Premium

Before we deep dive into how a car insurance premium changes as per the different states or geographical regions of India, let us first understand the basics of car insurance premium. It refers to an amount that is paid by the car owner or insured on a regular basis to the insurance company for purchasing a car insurance policy, which in turn provides financial protection to your four-wheeler against any physical damage or injury arising out of collisions and against third-party liabilities. 

A car insurance premium is affected by lot of different factors such as:

Car Type: The engine cubic capacity (cc) of the vehicle is one of the foremost factors that decides the premium of the car insurance coverage. The higher the cc of your car the higher will be the premium.

Vehicle Age: More coverage is needed for the new car as compared to the old car. As when the new car gets damaged, the repair cost is generally higher.

Fuel Type: CNG car asks for a more premium as the cost of maintenance is quite high in comparison to any petrol or diesel car.

Insured’s Declared Value (IDV): The IDV is the current market value of the vehicle, whose value is further administered by depreciation. Like for higher IDV, the premium gets higher and vice-versa.

Coverage Type: The third-party premium is mandatory which is for other than own damage, but if someone goes for a comprehensive one then the premium is comparatively higher and varies from insurer to insurer depending on the various discounts and rates they offer. And, if add-ons have been purchased along with the comprehensive coverage, then the premium rates increase accordingly.

Lastly, Location of the Car Registration: Location in which your car is registered plays a very crucial role in calculating the premium of your car insurance coverage. So, if someone lives in an urban area or in a highly populated city or metro city, the premium rates would be higher. For a simple reason that in such areas, the chances of claims are more because of traffic, congestion, vandalism and other issues.

Now, let’s understand in depth how different premiums are charged as per different geographical locations.

Change in Car Insurance Premiums State-Wise

As per the Indian insurance regulatory body, Insurance Regulatory and Development Authority of India (IRDAI) has divided the different Indian regions and sub-regions into two geographical zones— Zone A and Zone B.

Zone A consists of eight major Indian cities such as New Delhi, Mumbai, Bengaluru, Ahmedabad, Hyderabad, Kolkata, Chennai, and Pune.  

Zone B comprises the remaining part of the country.

The car insurance premium is higher in the cities belonging to Zone A in comparison to Zone B, because of higher population and heavy traffic, as these factors make your car more vulnerable to risks.

Car Insurance Premium Rates for Different Location

The premium rates for different geographical locations have remained unchanged since June 30, 2022 as per Motor Vehicles Act. The table given below depicts the car insurance premium rates for the two geographical zones, Zone A and Zone B, based on the vehicle’s age and cubic capacity of engine. 

Premium Rates for Zone A 

Vehicle’s AgeCubic Capacity of Engine (Private Car)
Less than 1000 CCBetween 1000 - 1500 CCAbove 1500 CC
Less than 5 Years3.127% of the IDV3.283% of the IDV3.440% of the IDV
5 to 10 years3.283% of the IDV3.447% of the IDV3.612% of the IDV
Above 10 years3.362% of the IDV3.529% of the IDV3.698% of the IDV

Premium Rates for Zone B

Vehicle’s AgeCubic Capacity of Engine (Private Car)
Less than 1000 CCBetween 1000 - 1500 CCAbove 1500 CC
Less than 5 Years3.039% of the IDV3.191% of the IDV3.343% of the IDV
5 to 10 years3.191% of the IDV3.351% of the IDV3.510% of the IDV
Above 10 years3.267% of the IDV3.430% of the IDV3.596% of the IDV

(Source: India Motor Tariff, 2002 )

Bottom Line

So, next time remember that even if you change cities across India, your car premium rates might fluctuate as per the zone you have located to. Also, note that there will not be much of a difference in premium if you have moved to a nearby locality. But, if you move to another Indian state, then your car insurance premium will be revised for sure.

Read our article to know more on the best car insurance policies available in India. 

Frequently Asked Questions [FAQs]

I stay in a tier-2 city, will my premium be changed if I move my location to New Delhi?

Yes, definitely. Tier-2 cities fall in zone B category, which has comparatively lesser premium rates as compared to zone A, where New Delhi belongs to.

Is my address an important consideration in car insurance?

What is IDV in car insurance?

While calculating the car premium via online insurance premium calculator, do i need to submit my location details also?

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