Using a Car Insurance Calculator to Buy Third-Party Insurance

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When we drive our cars on the road, we believe that driving cautiously and following the set guidelines will keep us out of harm’s way. However, driving involves a significant amount of risk, as the roads are quite unpredictable and may lead to fatal accidents, sometimes even injuries or death. There is also the possibility of damages to a third-party vehicle. A third-party insurance policy will cover such liabilities and take care of the costs incurred.

What is third-party car insurance?

Car insurance companies in India provide different plans when it comes to third-party car insurance policies. These policies are designed to be affordable since they offer basic third-party coverage and do not cover the damages of the policyholder. The reason for this is that third-party car insurance is mandatory for every car owner, without which, one may end up paying traffic fines or even facing legal trouble in case of third-party damages. If your car is involved in an accident that leads to injuries to the third-party or damages their property, the policy will take care of the damages.

Calculation of third-party car insurance premium:

While the calculation differs for different insurance companies, the three integral factors used for conducting these calculations are listed below:

  • The cubic capacity of the car:

The cubic capacity of the car is the measure of the engine’s size. The cubic capacity remains the same throughout and does not change over time. Hence, it’s an essential factor for a car insurance calculator. The premium amount you pay will partially depend on your engine’s cubic capacity. A high cubic capacity results in a hike in the premium cost.

  • Car’s age:

The car’s age plays a significant role in the premium calculation. This is attributed to the fact that the car’s value begins to depreciate as time passes. Hence, an older car would incur a lower risk, and the insurance premium decreases with the car’s age.

  • IDV of the car:

The IDV (Insured Declared Value) is the value of the car calculated by your insurance provider when you apply for the insurance. This value is the amount you will get if you file a claim for any damages to the car or theft. But since the value of the car changes with time, the IDV of the car is also affected. Keep in mind the IDV only applies if you have a comprehensive insurance policy and not a third party insurance policy.

Some other factors like a car’s price or the safety devices installed in the car affect the insurance premium. The formula used by the insurance premium calculator is:

Premium= Damage premium (NCB + discounts) + Liability Premium as set by IRDAI + Add-ons cost

You can use the calculator when buying online four wheeler insurance. To get an accurate estimate on the premium amount you will need to pay, you will need to provide the details listed below:

  1. Name of the car manufacturer.
  2. Car’s model number.
  3. Manufacturing year.
  4. Fuel type used in petrol, diesel and CNG.
  5. Registration date of the car.

Features of the third-party insurance cover:

Despite being a basic car insurance cover, the third-party insurance has a few features which make it an essential layer of protection for your car:

  1. All motor insurance companies in India provide third-party insurance in India, since having third-party coverage is a legal compulsion.
  2. The beneficiary of the policy is the individual affected by the policyholder’s car.
  3. The policy can provide financial coverage for the damage costs incurred by the policyholder, even if the third party is permanently disabled, or passes away.
  4. The IRDAI (Insurance Regulatory Authority of India) handles the coverage calculation for this policy. The compensation is calculated keeping two factors in life:
  • The financial stability of the policyholder.
  • The engine capacity of the car that caused the accident.

Benefits of third-party car insurance:

  • These policies will help you take care of the finances in a difficult situation that involves hefty bills. Through these plans, you will be shielded from the financial options and you can focus on handling other situations related to the incident.
  • Since this coverage is a legal compulsion, the policy cost is quite affordable. However, the costs may vary at different insurers. Apart from this, the cost would depend on the car’s make, model and variant.
  • The method to purchase this plan is quite easy and quick and can be completed in a short span of time. You can also purchase the policy online.
  • The policy will take care of your legal liability in the event of the third-party’s injuries or demise.

After entering these details, you will get the premium quote. However, it is important you provide accurate information to get 3rd party car insurance online. Since the premium quotes you get will entirely depend on the information you provide. With the calculator’s help, you can also understand the suitability of an insurance policy. You can also modify the information you provide so you can change the different features of the plan to increase its affordability.