There are many factors that are involved in securing car insurance, and your location is a significant contributor to the premium you pay. Insurance companies assess risk, and part of that risk assessment is where your car is registered. It is always wise to buy car insurance online and compare insurance premiums in various zones to get a good deal.
How Car Insurance Premiums Change According To Insurance Zones?
The Insurance Regulatory and Development Authority of India (IRDAI) divides the country into insurance zones. These zones standardize premium rates across regions, which is a major factor for the difference in car insurance premiums.
Some primary zones for private cars are:
- Zone A: In major metropolitan cities, vehicles registered in Zone A RTOs pay higher base rates due to traffic density and higher-risk zones.
- Zone B: The rest of India. All other towns and cities are covered as Zone B. These registrations do have a lower standard rate due to lower average claims frequency.
- Zone C: In IRDAI’s tariff, Zone C for vehicles is referred to as the “rest of India.” (like larger vehicles for commercial or passenger purposes).
How Is Insurance Premium Calculated For These Zones?
The following tables show the premium in both zones. Based on the zone you are present in, the respective premium will be applied to you.
-
Zone A
| Car’s age | For engines less than 1,000 cc | Engines between 1,000 and 1,500 cc | Engines 1,500 cc and above |
| Up to 5 years | 3.127% of IDV | 3.283% of IDV | 3.440% of IDV |
| Between 5 and 10 years | 3.283% of IDV | 3.447% of IDV | 3.612% of IDV |
| 10 years and beyond | 3.362% of IDV | 3.529% of IDV | 3.698% of IDV |
-
Zone B
| Car’s age | For engines less than 1,000 cc | Engines between 1,000 and 1,500 cc | Engines 1,500 cc and above |
| Up to 5 years | 3.039% of IDV | 3.191% of IDV | 3.343% of IDV |
| Between 5 and 10 years | 3.191% of IDV | 3.351% of IDV | 3.510% of IDV |
| 10 years and beyond | 3.267% of IDV | 3.430% of IDV | 3.596% of IDV |
The above tables may help you understand how the premium varies as per the zone. When you buy car insurance online and check for policy quotes with the help of a car insurance premium calculator, these same factors are taken into consideration.
Geographical Factors Affecting Car Insurance Premium
The following aspects may have an impact on your third-party or comprehensive car insurance premium:
Traffic Density and Accident Statistics
Traffic density in an area is an important factor in car insurance rates. Insurance companies raise premiums in these areas in accordance with the expectation of possible consequences.
Crime Rates and Theft
Geographic areas with higher crime rates, like areas with a high incidence of vehicle thefts, will generally attract higher car insurance premiums. If there is a history of vehicle theft or vandalism in an area, insurance companies will respond accordingly.
Weather and Natural Disasters
The weather patterns for a particular geographical area can influence the premiums paid for car insurance. Insurance companies will evaluate the risk of the region suffering from claims relating to weather.
Road Infrastructure and Conditions
Car insurance premium prices are also determined in part by the condition of the road infrastructure. In areas with different types of roadway hazards that damage vehicles, insurers have to assess the probability of claims being submitted.
Population Density and Demographics
The population density and demographics of an area are major factors for differences in motor insurance. Urban areas have a tendency to yield a higher number of insurance claims from vehicles sharing the same space due to the high number of cars in close proximity.
Conclusion
Your motor insurance rate is formed not only by your vehicle’s specifics but also by your location and its risk profile. Living in an area that is prone to theft or accidents is important. It’s advisable to buy car insurance online after carefully researching plans in order to save money and have appropriate coverage.