Many factors influence car insurance premiums. For instance, zero-depreciation car insurance is an add-on that covers depreciation costs, and since it’s an add-on, it can raise your overall premiums.
Similarly, another influencing factor in four-wheeler insurance is the policyholder’s region of residence and operation. Let’s understand how!
Car Insurance Premiums and Regions
The location of your car and where it is driven makes a big difference in determining your car insurance premiums. When a certain location is associated with more risk or is prone to accidents, policyholders from that location are likely to raise claims.
To mitigate and minimise this risk, car insurance policy providers often treat different regions differently when deciding premiums.
According to the Insurance Regulatory and Development Authority of India, there are two types of regions in this country. These regions are differentiated into zones, and we will understand how insurance premiums work in these zones.
Insurance Zones in India
India has two insurance zones pertaining to four-wheeler insurance. Your car insurance premiums are determined based on the zone you live in.
Zone A consists of cities like Mumbai, Pune, New Delhi, Chennai, Hyderabad, Kolkata, Bangalore, Ahmedabad and other metropolitan or developed cities.
Zone B consists of other small cities and towns of India.
If you use the car insurance premium calculator of a reliable provider, like TATA AIG, and enter the zone you belong to, you will receive the respective premium percentage. Let us see how the premium percentage works in different zones.
Zone A Car Insurance Premium Percentage Calculation
| Car’s Age | For Cars Less Than 1000cc | For Cars Between 1000-1500cc | For Cars Above 1500cc |
| 0-5 years | 3.127% of IDV | 3.283% of IDV | 3.440% of IDV |
| 5-10 years | 3.283% of IDV | 3.447% of IDV | 3.612% of IDV |
| 10 or more years | 3.362% of IDV | 3.529% of IDV | 3.698% of IDV |
cc = Cubic Capacity
IDV = Insured Declared Value
Zone B Car Insurance Premium Percentage Calculation
| Car’s Age | For Cars Less Than 1000cc | For Cars Between 1000-1500cc | For Cars Above 1500cc |
| 0-5 years | 3.039% of IDV | 3.191% of IDV | 3.343% of IDV |
| 5-10 years | 3.191% of IDV | 3.351% of IDV | 3.510% of IDV |
| 10 or more years | 3.267% of IDV | 3.430% of IDV | 3.596% of IDV |
Cc = Cubic Capacity
IDV = Insured Declared Value
How Does Location and Region Affect Car Insurance Premium
● Traffic and Accidents
The amount of traffic and accident rates are a huge contributor to influencing your car insurance premiums. If you observe, zone A cities have a high density of traffic and a rising number of accidents. This results in an increased policy premium.
However, Zone B has a lower percentage of these incidents. So, if you live in Insurance Zone B of India, you can buy low-premium car insurance for your four-wheeler.
● Criminal Activities
The crime rates of a particular region increase the risk of thefts and claims, both alike. If particular cities observe a rise in criminal activities, theft and vandalism, the providers have no choice but to allocate high premiums.
On the other hand, cities and towns with low crime rates enjoy low-premium car insurance.
● Road Conditions
If the road conditions and infrastructure of the concerned city are bad, they can affect car insurance premiums. Bad roads, potholes, poor infrastructure and badly managed systems can lead to multiple accidents.
This leads to an increased number of claims raised by policyholders. Hence, you observe an increasing trend in the percentage of car insurance premiums.
Location is not the only factor that affects your car insurance premium. You can rely on other factors that will adjust the premium according to your preference and compare car insurance premiums for a better deal.
Final Thoughts
Car insurance premiums are determined using a variety of different factors – not just your location. So, if you live in Zone A and feel that you want low-premium car insurance, fret not; you can easily adjust the amount by reducing or adjusting other factors, be it lesser sum assured, more voluntary deductibles, no-claim bonus discounts or more.
Reputable insurers like TATA AIG also offer several discounts on their online car insurance policies. So, there are lots of ways to lower your car insurance premiums, regardless of your resident city or location.
