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

As you may know, having at least a third-party liability policy is mandatory for car owners. However, the government and insurance provider promote buying a comprehensive policy as it includes third-party liability coverage along with coverage against damages to your own vehicle. This goes to show how important car insurance. However, having car insurance is also a responsibility.

A car insurance policy needs your attention every time it expires, because its validity period is limited.  Usually, car insurance policies have a duration of one year. If you buy a multi-year policy, this duration can be around three years. However, eventually you would have to weigh all the options and renew the plan to get continuous coverage. When renewing a plan for optimal coverage, you should keep in mind the car age, your current location, the number of claims, etc., as these are some of the factors that determine the premium. The aim of this article is to explain the relationship between the location of the car and the premium for insurance coverage.

Understanding car insurance premium

Before delving deeper into how your current location affects car insurance premiums, let us first look at some of the basics in the concept. Car insurance premium is the amount you pay to the insurance company to purchase a specific plan. It is essentially a fee for having the coverage for the duration of the policy. *

A car insurance premium calculator is often used to determine how much the premium for a specific amount of insurance coverage will be. This is a free online tool that is usually available for use on the insurance company or aggregator website. You can also adjust some of the items to make the premium fit your budget. *

Do the premium rates vary in different Indian states?

One of the major factors that car insurance companies consider when calculating a premium is where your car is registered. Since car owners usually register the car at the nearest Regional Transportation Office (RTO), it is safe to say that the car insurance premium will change if you change your place of residence. *

Keep in mind that if you move to a nearby area, it will not have a big impact on premiums. However, your car insurance premium will be revised if you migrate to another Indian state. *

What are car insurance zones?

The Insurance Regulatory and Development Authority of India (IRDAI) regulates the Indian insurance industry. According to this government agency, the various Indian regions are divided into two parts – Zone A and Zone B. The car insurance premium varies depending on the areas where you have registered the car. *You can visit the official website of IRDAI for further details.

Zone A includes major Indian cities such as Mumbai, Bangalore, Ahmedabad, New Delhi, Hyderabad, Kolkata, Chennai and Pune. However, Zone B is the rest of the country. The premium rates for Zone A tend to be slightly higher.*

* Standard T&C Apply

One of the main factors for the difference in premium is the probability of claim. Urban cities are much more densely populated than rural areas. Hence, the population of vehicles is also very high. This leads to a large number of traffic jams and increases the likelihood of claims as the probability of accidents is high. The higher premium here is to cover the higher risk involved in car insurance. Moreover, the IRDAI sets the price for third party car insurance. Insurance companies have more of an agency over comprehensive coverage prices. * You can visit the official website of IRDAI for further details.

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