How to calculate your car insurance premium in 5 easy steps?

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When you buy a car you must remember to insure it. But most people make the mistake of purchasing insurance based on recommendations made by their car dealer. Car manufacturers are typically affiliated with certain insurance providers and receive commission for recommending them. This, however, is not in your best interest. In fact, you should choose insurance based on your requirements and budget. You can use a car insurance premium calculator to help you understand just how much you would be spending on your insurance premium. Here’s how you can use this handy tool.

How to use a car insurance calculator?

A car insurance calculator is an online tool, freely available on all insurance provider websites. It allows you to compute your insurance premium based on many factors such as the coverage you require, the add-on riders purchased, the no-claims bonus you are eligible for and so on. Here are the steps you should follow to calculate your insurance premiums.

  1. Finalize an insurance provider and visit their website

The first step is to finalize an insurance provider based on the benefits and coverage they offer. Do your research and finalize an insurance provider who can offer the best car insurance policy. Consider factors such as the insurance provider’s market reputation, claim settlement ratio and customer service offered before finalizing one. Once you have picked an insurance provider of your choice visit their website and start the premium calculation process.

  1. Choose the type of car you wish to ensure

Once you are on the insurance provider’s website you need to choose the type of car you need insurance for. This simply means that you need to choose whether you are buying insurance for a brand new car, a used car or simply renewing your insurance policy by making some changes. You should also select the type of car (e.g. sedan, hatchback, SUV, MUV, etc.) for which you need insurance. Select the appropriate category and move on to the next step.

  1. Enter the necessary details

The premium rates for car insurance policies differ based on several factors including your personal requirements. To calculate the exact insurance premium amount, you need to enter your vehicle details such as your car registration number, your car’s make and model, your existing insurance policy number (in case you are changing your insurance provider or renewing your policy) and the policy dates. In case of used car, you need to provide extra details such as details of previous owner, claims filed etc. to get the right insurance premium quote.

  1. Choose the add-on covers

Once you have entered the above mentioned details in the car insurance premium calculator, you need to consider whether or not you need any add-on covers. You can choose from a wide range of additional riders offered by your insurance provider. The calculator computes your insurance premiums based on the number of add-on riders you purchase.

  1. Calculate your no-claims discount

The reason insurance providers ask for your car details, is so that they can pass on the benefit of no-claims bonus in case you qualify for it. No-claims bonus is simply a discount offered on premium payments if you do not encash your insurance policy. The best car insurance is one where you get discounts of up-to 50% for not filing claims for five consecutive years. This bonus is computed in the premium calculator.

Once all these details are entered into the calculator, you can get the accurate premium amount. This handy tool prepares you in advance for the premium you would pay against your insurance policy.

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