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Striking Impact of Your Car's Engine Capacity on Its Insurance Premium

As we are aware, several aspects affect the vehicle’s insurance premium. The engine capacity (CC) of the vehicle is one of the key one. By the time you finish reading this article, you’ll be armed with all requisite specifics about how the cubic capacity affects your car’s insurance premium.

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As you know, if your car is one amongst the million cars plying on Indian Roads, then according to the Motor Vehicles Act, 1988, it is your accountability as the owner of the car to have a at least Third Party Insurance.

Third Party Insurance is one of the two car insurance policies that a customer can avail, Comprehensive Insurance Policy being the other one. Third Party Insurance is mandatory for all plying vehicles. This is an insurance cover that the vehicle owner has to buy from the insurance company to compensate for the loss or damage caused to a third party, a beneficiary other than the vehicle owner and the insurance company.

For covering other damages like damage to the vehicle or the driver due to total damage or theft, you have to buy Comprehensive Insurance Cover as it comprises of Own Damage Cover as well as Third Party Cover. So why is it important to know the Cubic Capacity of your car engine for your car insurance premium calculation?

Well, the premium for Third Party Insurance is controlled and tariffed by Insurance Regulatory Authority Of India and is based on your car engine capacity. Whereas for other motor insurance covers, such as own-damage, which covers damage to one’s own car, the premium is decided by the insurance company which depends on many factors.

How Third Party Insurance Premium Gets Impacted By Car Engine Capacity?

The total power produced by your car engine is measured in terms of Cubic Capacity and the engine size influences your car insurance premium particularly the Third Party Insurance Cover.

Whether the car is old or new, the premium amount decided for the vehicle is the same for both as premium depends on the engine size and not the age of the car in case of Third Party Cover.

Cubic Capacity Of Car Engine Premium in Rs.
Not Exceeding 1000 CC Rs. 1,468
Exceeding 1000 CC but not Exceeding 1500 CC Rs. 1,598
Exceeding 1500 CC Rs. 4,931

The amount of Premium for Third Party Insurance cover is fixed by IRDA and are revised every year.

How Cubic Capacity Impacts Your Own Damage Premium In Case Of Compulsory Deductible? Compulsory deductible in a Car Insurance Policy refers to the part of the monetary loss which an insured has to necessarily bear towards the claim while the insurer pays the rest. It is a specific amount, which needs to be paid necessarily in order to get the vehicle damage claim which means it is applicable to all of the policyholders.

The compulsory deductibles depend upon the cubic capacity of the vehicle and cannot be removed from the insurance policy.

Cubic Capacity Of Car Engine Premium in Rs.
Not Exceeding 1000 CC Rs. 1,468
Exceeding 1000 CC but not Exceeding 1500 CC Rs. 1,598
Exceeding 1500 CC Rs. 4,931

In case of Comprehensive Car Insurance Cover, Cubic Capacity of your car engine is just considered as one of the criteria along with Age of the vehicle and the geographical location for determining the factor that is adjusted to the Insured Declared Value to calculate the own damage premium.

Engine CC < 5 Years 5-10 Years 10+ Years < 5 Years 5-10 Years 10+ Years
< 1000 cc 3.127 3.283 3.362 3.039 3.191 3.267
1000 - 1500 cc 3.283 3.447 3.529 3.191 3.351 3.430
> 1500 cc 3.440 3.612 3.698 3.343 3.510 3.594

Premium Calculation Example

Maruti Alto – 2 Years Old – Reg: Mumbai

Own Damage

IDV x Factor (After Discount) Gives OD Premium

Ex-Showroom Price = Rs. 4,00,000

IDV = 70% x Rs. 4,00,000 = Rs. 2,80,000

Mumbai = Zone A

Maruti Alto – 998 CC

Factor = 3.127%

OD Premium = 2,80,000 x 3.127% = Rs. 8,756

OD Premium (After 40% Discount) = Rs. 5,253

TP Premium = Rs. 1,468

PA Owner Driver = Rs. 100

Total Premium = 5,253 + 1,468 + 100 + ST = 6,281 x (1+14%) = Rs. 7,776

Conclusion: The Cubic Capacity of your car engine determines your insurance premium. So the next time you either purchase the car insurance policy or renew the same, do check that your insurance premium is according to the Cubic Capacity of your car engine.

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Aniket Thakker
Written by Aniket Thakker
He lives off TV shows, movies, junk food, comics and sarcasm. When he is not working as a freelance imaginary friend to other beings like him, he works as VP of Marketing at Coverfox.

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