Why Is New Car Insurance So Expensive In India?

Causes of Rise In New Car Insurance Premium 

Are you perplexed why your new car’s insurance premium is higher than your previous one? There may be several causes for this. Your car’s make, model, age, IDV, and security features all factor into how much your auto insurance will cost. Below, we have outlined a few significant causes for the high cost of your new auto insurance. Look at this:

1. IDV Increases With Premiums

The compensation you receive if your car is a total loss is referred to as IDV or the Insured Declared Value of a vehicle. The premium for your car directly relates to this sum. Your tip will increase if you raise the car’s IDV and vice versa.

IDV is calculated by considering the ex-showroom cost, the vehicle’s variant, and depreciation at the beginning of the policy. A new car attracts a higher IDV, and a higher IDV leads to a higher car insurance premium because of the higher cost and lower initial depreciation.

2. Age Of The Vehicle

The age of the vehicle is another essential factor contributing to the high cost of new comprehensive car insurance. The insurance premium for an older car will be lower. The depreciation of the car is one of the main causes of this. A car’s rate of depreciation increases with age, which lowers the IDV of the vehicle and, in turn, lowers insurance premiums. ##

3. Expensive Repairs

If a car needs repairs after an accident, the cost will increase the newer the car is. Additionally, the cost of repairing a luxury vehicle like a Honda City will be higher than that of a fit vehicle like a Wagon R. Companies that provide auto insurance consider this when calculating a four-wheeler’s insurance premium.

Because new cars are more expensive to repair, an insurer’s financial liability is increased, which raises the cost of their motor insurance.

4. Greater Chance Of Theft

A new car will also have a higher risk of theft than an older one, so the premium will be higher. The insurer’s liability at the time of claim settlement will also increase due to an increase in the likelihood of theft.

How Is The Cost Of New Car Insurance Calculated?

Calculating the premium for a new car is no longer difficult, thanks to the development of the online car insurance premium calculator. Fill out the car insurance calculator with the specifics of your new vehicle and submit it.

Based on the model, variant, registration year, and other information, the online car insurance calculator will determine the cost of your new vehicle. You can compare car insurance plans from various insurers and find the one that suits your needs, in addition to figuring out how much car insurance will cost.

Various factors contribute to the high cost of new car insurance in India. These include the country’s challenging road conditions, high incidence of accidents and thefts, inadequate infrastructure, rising repair costs, and the absence of comprehensive data for accurate risk assessment.

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply

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