What Is Yearly Car Insurance Cost In India?

by SMCIB on Thursday, 20 June 2024

What Is Yearly Car Insurance Cost In India?

Car insurance is a surefire backup, just like your sturdy umbrella, shielding you from sudden rain showers. As you don’t leave home without an umbrella on a rainy day, car insurance is a must for negotiating the uncertain world of Indian roads. It protects you from financial shocks that could be caused by accidents, thefts, and other contingencies that you could not have foreseen, leaving you soaked in expenses.

Purchasing car insurance is of great importance, and so is ensuring that you pay the annual premiums on time to maintain your protection.

Another important element in this “secure your car” journey is knowing the yearly cost of car insurance for better financial management. This can help you assess if the coverage fits your budgetary needs. However, there are several factors that determine the car insurance cost, and this article shall help you in dissecting everything related.

So let’s begin-

Car Insurance- Meaning & Benefits

Care Insurance protects your car from all sorts of loss or damage due to road accidents, theft, natural disasters, and other negative eventualities. This is not only a prudent decision but also a mandate for every vehicle that runs on Indian roads.

One of the reasons for launching Car Insurance is to financially safeguard the owners of vehicles so they can meet their legal obligations with ease.

Whether it be a minor fender bender or a major accident, having car insurance by your side will help you manage your financial fallout by being well-covered when needed.

Types Of Car Insurance In India

There are different types of car insurance policies available in India -

  • Third-Party Liability Insurance
    Coverage: It is the most basic and also compulsory car insurance needed in India. It provides active coverage for damage caused to third-party property or for any injuries/death because of your vehicle. This type of insurance will guarantee you that, in case of an accident, you won't suffer the financial cost of compensating third parties by yourself.

    Exclusions: It does not include any damage to your own vehicle or personal injuries.
  • Comprehensive Car Insurance
    Coverage: This type of insurance offers all-round coverage. It is inclusive of third-party liability and further assures damages caused to your vehicle on account of accidents, theft, natural calamities such as floods, earthquakes etc., man-made calamities like riots, vandalism, etc., and even provides personal accident cover.

    Benefits: It offers much broader protection and peace of mind, covering the whole range of possibilities. Comprehensive Car Insurance guards a person against many unforeseen eventualities, enabling them to handle things without causing much stress.
  • Own Damage Cover
    It covers your vehicle against accidents, theft, fire, or natural calamities. Own damage cover is responsible for guarding you against various mishaps, eventually offering peace of mind.

Note: Own damage cover is available in India separately from third-party liability insurance since 2019.

What Is Yearly Car Insurance Cost In India?

On average, the car insurance premium within India lies in the range of Rs 10,000 - Rs 20,000 per annum, and even more. However, to get an exact idea about the cost, customised quotes from the insurer must be sought, taking into consideration variables such as your vehicle type, age, location, etc.

That will help you find the best economical coverage for your needs. You can do that by comparing quotes from several insurance companies.

Check out the insurance premium by a couple of companies for TATA TIAGO XT Rhythm -

Insurance Company


United India Insurance


Shriram General Insurance


Zuno General Insurance


Reliance General Insurance


HDFC Ergo General Insurance


SBI General Insurance


Chola MS General Insurance



Note: The premium is for the Comprehensive Policy of the model TATA TIAGO XT Rhythm (Brand New Car) with the following criteria -

  • 1199 CC,
  • MH-04 Registration
  • IDV- ~ 5,00,000/-

The premium is taken as of 31/05/2024.

Factors Affecting The Cost Of Car Insurance

There are a number of factors that determine the cost of insurance for your vehicle in India. Knowing these will help you make well-informed decisions at the time of policy purchase. Here are some factors that determine the cost of car insurance in India-

  • First on the list is the Type of Coverage
    Cost may depend upon the type of coverage you have opted for -
    • Third-Party Liability: Since this is the most basic coverage compared to comprehensive plans, covering damages to your vehicle, it usually is comparatively cheaper.
    • Comprehensive: Comprehensive coverage is more expensive since it provides greater protection; this encompasses damages to one's own vehicle and third-party liability.
  • Insured Declared Value (IDV)
    Having a higher IDV means a higher premium. IDV is the maximum claim amount that your insurer will pay in the event of total loss/theft. The more coverage you want for the value of your vehicle, the higher the premium you'll pay.
  • Vehicle Make And Model
    Premiums for insurance are mostly higher for expensive and high-class cars since their repair may cost considerably more, and the risk of theft could well be higher.
  • Next up is Engine Capacity CC
    The premium is usually higher for larger engine cars because they create a greater risk and normally cost more to repair.
  • Age Of The Car
    The newer cars are often charged a higher premium because their Insured Declared Values are higher, representing the present market value. On the other hand, premiums for older cars would be low due to devaluation. But they could entail higher costs in case of repairs, as they require more maintenance.
  • Geographical Location
    The car insurance premiums are usually higher in urban areas where traffic is dense, and the accident rates are higher. On the other hand, premium rates are usually lower in rural areas where the probability of accidents and cases of theft are fewer.
  • No Claim Bonus (NCB)
    You'll get a No Claim Bonus as a discount on your premium for every claim-free year. This accumulated No Claim Bonus can significantly bring down the overall premium and hence act as an incentive to drive carefully.
  • Add-Ons and Riders
    The addition of optional coverage, such as zero depreciation, roadside assistance, protection against engine damage, etc., will raise your premium since they provide additional layers of protection to your insurance cover.
  • The last thing on the list is- Deductible
    A voluntary deductible is an amount you're willing to pay before your insurance coverage cuts in. A higher voluntary deductible will actually decrease your premium. On the contrary, a lower deductible means a higher premium.

Disclaimer- Please note that if you have chosen a voluntary deductible, then you will have to pay the voluntary deductible amount from your own pocket every time you make a claim.

Summing Up

The average premiums of car insurance range from INR 10,000 to INR 20,000 annually. Again, the cost depends on many things: coverage, value of your car, make, and model, among others. You will get the best deal only by getting personalised quotes from insurers. This way, you will keep your vehicle protected without it costing you an arm and a leg. By comparing options and taking into account the points noted above, you will be assured that you are properly covered for whatever the road may throw at you.

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