Your four-wheeler insurance premium isn’t a random number. It’s calculated using a mix of vehicle-related inputs (such as IDV, age, and variant) and driver/policy inputs (such as claim history, add-ons, and deductible). In most cases, your total premium includes own damage and third-party components. Own damage varies by risk, while third-party is generally set by the regulator for a given vehicle category and engine capacity. If you choose comprehensive insurance, you’re typically paying for third-party and own damage together, which is why the premium can vary more.
Below are the key factors insurers commonly use to price your premium, especially for comprehensive insurance.
1) Insured Declared Value (IDV)
IDV is the sum insured for your car. A higher IDV usually increases your own damage premium, because the potential payout is higher in case of theft or total loss. Choosing an unrealistically low IDV can reduce premiums, but it can also reduce your claim payout. The right balance is to keep IDV close to your car’s fair market value.
2) Car Make, Model, Variant, and Repair Costs
Two cars of the same price can still have different premiums. Why? Because insurers price in repair severity and parts availability.
Premiums can be higher for:
- Expensive variants and higher trims
- Vehicles with costly body parts/electronics
- Models with higher theft risk or higher claim frequency trends
3) Age of the Vehicle
As your car gets older, its IDV typically drops, which can reduce your damage premium. However, for some older vehicles, the risk of breakdowns and claims may rise, and certain add-ons may become unavailable or restricted. This becomes important during car insurance renewal.
4) Engine Capacity and Fuel Type
Engine capacity often influences the third-party portion (and sometimes the overall risk assessment), while fuel type can affect pricing due to differences in usage patterns and repair costs. For example, larger engines and certain vehicle segments may attract higher premiums compared to smaller, mass-market cars.
5) Registration Location and Where You Drive
Your city/RTO matters because insurers factor in traffic density, accident frequency, theft rates, and the repair ecosystem in that area. Premiums are often higher in metros and high-claim zones than in smaller towns.
6) Type of Policy: Third-Party vs Comprehensive Insurance
- Third-Party Insurance: Covers legal liability for injury/death/property damage to others. It’s mandatory to drive legally, but it does not cover your own car’s damage.
- Comprehensive Insurance: Includes third-party and own damage. This is what most people mean when they talk about car insurance premiums, because own damage and add-ons can significantly change the price in four-wheeler insurance.
7) No Claim Bonus (NCB) and Claim History
If you don’t make your own damage claim during the policy period, you usually earn NCB. Higher NCB can reduce your premium meaningfully and is one of the most common premium discounts people benefit from. If you’ve made claims, your renewal premium may increase, and your NCB may reset (unless you’ve opted for an NCB Protection add-on, where available and applicable) during four-wheeler insurance renewal.
8) Add-Ons You Choose
Add-ons increase the premium because they expand coverage beyond the base policy. The add-on benefits can be worth it, but they do raise your cost. Common add-ons that change the premium the most include:
- Zero Depreciation (higher premium; lower out-of-pocket on parts depreciation during claims)
- Return to Invoice (RTI) (useful for newer cars; premium higher)
- Engine & Gearbox Protection (important for waterlogging risk; premium is higher)
9) Voluntary Deductible
A voluntary deductible is the amount you agree to pay from your pocket for every claim. A higher voluntary deductible generally lowers premiums because you’re sharing more risk. This is another way people get premium discounts. This works best when you’re confident you won’t claim for minor damage and can comfortably cover minor repair bills.
10) Anti-Theft and Safety Features
Approved anti-theft devices and strong safety features can reduce risk, which may be reflected in discounts or better pricing in some cases. While the discount may not always be large, it can still help, especially in theft-prone areas or for certain vehicle types.
11) Usage Pattern and Owner Profile
Some insurers consider how the vehicle is used (personal vs commercial, frequency of usage, annual kilometres when captured). Cars used more intensively can attract higher premiums due to higher exposure.
12) Policy Tenure, Coverage Choices, and Previous Policy Status
A lapsed policy can affect pricing and may require inspection (this can impact four-wheeler insurance renewal). Coverage choices such as electrical/non-electrical accessories, CNG/LPG endorsement, and paid driver cover can affect the premium. Multi-year third-party (and in some cases multi-year packages) can alter the payment structure across years.
Conclusion
Your four-wheeler insurance premium depends on your car’s IDV, age, location, claim record, and the cover you choose. Comprehensive insurance, add-ons, and deductibles can significantly change the price. Review these details at the four-wheeler insurance renewal to keep the right protection and premium discounts.
