Buying car insurance plans for your precious ride can often be a long and confusing process, even more so for someone who is buying car insurance for the first time. From conducting initial research to finalizing the plans, there is a lot to do when you are choosing a car insurance plan. That is why it is best to get a fair estimate of car insurance prices beforehand to simplify the decision-making process. This is where the car insurance premium calculator comes in handy. Let’s get to know what care insurance premiums are and how car insurance calculators work to find out potential premium rates for your car.
What is Car Insurance Premium?
Premium is the amount that you pay to the insurance company in return for the insurance benefits. It can be considered the amount that you are obliged to pay since the insurance company is taking on the risk of insuring your car against damages. The Premium amount for any particular car is calculated based on several primary and secondary factors. This includes the make and model of the car, condition of the car, insured declared value, etc. Apart from that, you as a policyholder and driver-owner of the car can also influence premium rates. Driving history, claim history and other related factors are also considered when deciding the premium of a car insurance plan for your car. The premium amount of your car insurance plan can be easily calculated using the Policybazaar UAE car insurance estimator.
Car Insurance Calculator
A car insurance calculator takes all primary tangible factors that affect car insurance premiums and quickly whip up the potential car insurance premium for your car. It is a free online tool that is available to everyone. You simply need to enter the details asked in the car insurance calculator prompt and get your car insurance premium with a simple click. Car insurance estimator can also be called comprehensive insurance calculator since it is the own damage premium amount that variates. Main factors like insured declared value of the car, applicable no claim bonus, promotional discounts, manufacturing year of the car, fuel types and your location. This calculation is further customised as per the plan and add-ons that you choose.
How to Use Car Insurance Premium Calculator?
Using a car insurance premium calculator from Policybazaar UAE is a piece of cake. All you need is a list of some important facts about your car and previous car insurance plans. Fill out the details in required columns and space Select ‘yes’ or ‘no’ depending on whether you filed a claim in the previous year. Click on calculate and that’s it. You will have your premium rate.
Details Required for Calculating Car Insurance Cost
Given below is the complete list of details you will need to calculate your car insurance premium using the Policybazaar UAE car insurance calculator:
Make and model of your car
The ex-showroom price of the car
The emirate you reside in
The year you bought your car
Whether you made any claims last year
How Can I Calculate My Car Insurance Premium?
A few factors are used in calculating the premium rates of car insurances prices in the UAE. These factors can include – insured declared value of the car, no claim bonus, and price of add-ons. Insured declared value is calculated by subtracting depreciation from the ex-showroom price of the car. IDV can be calculated using an IDV calculator as well. The Premium amount of your car insurance will have further two parts – third-party liability premium and own damage insurance premium.
The formula to calculate own damage premium goes = (IVD x premium rates + add-on rates) – (no claim bonus + promotional discounts).
The resulting amount is then added with the base price of third-party liability premium to get the final premium amount of your insurance plan. You do not need a third-party car insurance premium calculator here the price is generally fixed and added to the formula automatically.
Premium rates for own damage premiums generally range around 2-3% of the total insured declared value of the car. This is why premium rates are highly affected by the change that occurs in the insured declared value of a vehicle. Depreciation causes a change in the insured declared value of the car which can be calculated using a car insurance depreciation calculator. Further changes occur by considering the secondary elements that affect car insurance premium calculations. You skip all these hefty calculations and get your car insurance premiums calculated using the Policybazaar UAE car insurance estimator. This car insurance EMI calculator will not give you a fair premium rate but also suggest suitable plans for your car.
Benefits of Car Insurance Estimate Calculator in UAE
Several kinds of benefits can come out of calculating your car insurance plans beforehand. Given below are some of the top ones:
Priority Peek into Insurance Plans: Using a car insurance premium calculator tool to find the premium rates for your car gives you prior insights into the potential plans and prices that will suit you. This makes the overall procedure of finding and choosing plans easier and more swift for you and makes sure that you do not fall for fraudulent schemes.
Helps in Planning Ahead: Knowing how much maintenance of your car will cost including insurance helps you make a better decision. You can create your budget more efficiently and plan for other factors accordingly as well. Handling your finances smartly is what it’s all about at the end and a car insurance calculator helps a lot in this.
Gives You a Fair Idea of the Market Trends: Knowing market trends is the first thing you should do whenever buying something or investing. The same applies to car insurance plans as well. Using a car insurance premium calculator will help you in identifying the current estimated insurance rates for your car.
Helps Understanding How Variable Work: Once you find the basic rate of the car insurance plan for your car using a car insurance calculator, it is easy to understand how a particular variable changes it later. For example, the premium rate will change if you include an add-on on top of the basic plan or if your driving record is not very good. These changes in premium rates are easily identifiable once you have an idea of the base price of the plan.
Better Comparison Scope: needless to say, knowing the base price for your car insurance plan via a car insurance calculator helps in comparing the available plans and their cost-effectiveness. The better comparison you can draw, the easier it is to choose the perfect plan for your car.
Factor Affecting Car Insurance Premium
Age and Gender of the Driver: Older drivers with more hands-on experience get lower premium rates since they are at a lesser risk of being in an accident. Younger drivers aged 18-30 often get higher premium rates due to a lack of experience. If the trend shows that male drivers cause more accidents, the premium rates will go higher for them and the same applies to women drivers as well.
Insured Declared Value: Cars with higher insurance declared value get higher premium rates. IDV can be calculated by subtracting depreciation from the showroom price of the car. This is why new cars have higher premium rates as compared to old cars.
Condition of the Car: Cars that are kept in good condition attract lower car insurance prices since they are less prone to breakdown. A car that is new but in bad condition will get higher premium rates. This is determined by a small inspection at the time of renewal.
Age of the Car: Older cars get low premium rates since IDV also declines with age. This is why you are asked to mention the year in which you bought the car when using a car insurance estimator.
Geographical Location: If you live in an accident-prone area or drive often in such a region, your insurance premium will be higher. Apart from that different emirates may have different insurance rates for the same car too.
Fuel Type: Most common fuel types are plausible to get the lowest premium rates in the UAE. This means petrol cars stand at the lowest end, then diesel, the CNG and then electric cars.
Promotional Discounts: Many insurance companies offer a promotional discount on their car insurance plans. An example of this can be discounts offered on online purchases.
No Claim Bonus: Your accumulated NCB has a huge impact on the premium rates. NCB calculation is used as a primary factor when calculating car insurance premiums.
Modifications: Added features can impact car insurance premium rates as well. Practical modifications that reduce the risk for insurance companies can lower the premium, such as anti-theft devices. Other modifications such as aesthetic modifications or performance-enhancing modifications can increase the price.
Driving Record: The better driver you are, the lesser risk you create for car insurance providers. Drivers with good records often get reduced premium rates while a bad driving history can jack up the prices instantly.
Claim History: If you make too many small and big claims, you are viewed as a high-risk customer by the insurance companies and hence increase premium rates. People with lesser claims on their record attract lower premium rates.
Maintain a Good Driving Record: As explained before, a good driving record will earn you significant discounts on your car insurance premium.
File Lesser Claims: Avoid filing small claims that can be handled on your own. Instead, save your claims and try to accumulate no claim bonus to get higher discounts on car insurance premium rates.
Avoid Unnecessary Modifications: Aesthetic and performance-enhancing modifications generally increase the premium rates. Modifications increase the maintenance and repair cost of the car which is why the premium goes higher. Some insurance companies do not insure cars with too many modifications. If you like, stick to practical modifications such as anti-theft devices.
Take Higher Deductibles: Deductible is the amount you, the policyholder, is liable to pay out of the total claim amount. A higher deductible amount reduces liability for insurance providers. This is why premium rates come down when deductibles are higher in a car insurance plan.
Accumulate No Claim Bonus: If accumulated ideally, no claim bonus can help reduce your car insurance premium up to 50% in most cases. In some special scenarios, this percentage can even go up to 60-65%. The best way to have your car insurance premium reduced is by accumulating your no claim bonus and transferring it to the next you buy every time. The car insurance premium calculator also considers NCB when calculating your base premium. So, always keep a track of your NCB.
Avoid Making Small Claims: Making even the smallest claim, except for third party claims, will not only go on your permanent record but also reduce your no claim bonus to nothing. Instead of filing claims for every small repair you get done on your car, try and save it for the big ones. Having a claim history ridden with several claims can jack up your premium while a cleaner one will bring the rates down.
Always Renew on Time: There is a higher chance for your premium rates to rise if you have to re-activate an expired policy or buy a new one from scratch. On top of that, you lose your no claim bonus if an expired policy is not renewed in the next 90 days. Make it a priority to renew your car insurance on time every year.
Shop Online: Finding special promotional discounts on car insurance plans, or any other kind of general insurance, is very rare. But this does not mean you can never get any kind of relaxation on your premium prices. Shopping for your car insurance plans online is the best way to score some discount on top of the no claim bonus. Almost all providers in the UAE offer special online shopping discounts for plans bought online. Check out the latest trend for online shopping discounts.
Chances are that your premium rates will remain the same for at least the next three years after buying the car initially. But after that, there can be a change in the premium rates depending on depreciation of the car, condition of the car, insured declared value etc. You can use a car insurance premium calculator to get a fair idea of the changed premium prices. Car insurance premiums for older cars may decrease since the IDV is lower. But it’s best to not choose your insurance plan solely based on premium rates. Consider the extent of coverage you need and then choose the best possible option which is also cost-effective.
FAQs
Is car insurance premium higher for new cars? Why and Why not?
Ans: Yes, the car insurance premium is often higher for new cars as compared to the older ones. The reason is the higher insured declared value of new cars, also known as current market price/showroom price. New car insurance calculators consider this as one of the primary factors to influence car insurance premium rates.
What kind of insurance should be bought for new cars?
Ans: Comprehensive car insurance plans are the best kind of insurance plans for new cars since they offer third-party liability as well as own damage cover with many other benefits.
How can I reduce the car insurance premium of my car?
Ans: Consider maintaining a flawless driving record, keep your car in good shape and file as few claims as you can. Premium prices will lower significantly by adapting just these few measures.
Can I use a car insurance calculator when it is time to renew my policy?
Ans: Yes, you can use a car insurance calculator to calculate the premium prices of your car insurance plan upon renewal.
Where can I find a car insurance calculator for UAE?
Ans: You can easily calculate the premium for your car insurance plan using the Policybazaar UAE car insurance calculator. Simply enter the required basic information and obtain the premium amount for your insurance plan.
Will fuel type affect the premium of my car insurance plan?
Ans: Yes, fuel type is considered by car insurance calculators and often affects the car insurance premium. Cars that run on more common fuels like petrol may get lower premium amounts. On the other hand, diesel, CNG and electric cars may get higher premium amounts. Electric cars may attract the highest premium amounts of all being the rarest of all.
