Impact of Cubic Capacity on Car Insurance Premiums

Posted on: Oct 29, 2025 | 3 mins | Written by: HDFC ERGO Team

Impact of Cubic Capacity on Car Insurance Premiums

When buying a new car, you pay attention to multiple factors. You consider the interior, technology, tail lights, safety features, and much more. While the engine is also a key consideration, you may not be aware that it also affects the cost of insurance. Continue reading to learn how and discover tips to lower insurance premiums for high cubic capacity engines.

Understanding Cubic Capacity (CC) in Cars

Cubic capacity (cc) in a car refers to the total volume of all the cylinders in an engine. It is measured in cubic centimetres and indicates the engine’s size while playing a key role in determining the car’s performance, power, and fuel efficiency.

A higher cubic capacity means the engine can burn more fuel and air mixture to produce higher power and acceleration.

For example, if you have cars with engines above 1500cc, you can experience smooth and strong performance, but at the cost of more fuel consumption. While higher cc cars are suited for long drives and navigating rough terrain, those with smaller engines are more fuel-efficient and suitable for city driving.

Role of Cubic Capacity in Car Insurance

When you buy comprehensive car insurance, it has two components: one is coverage for third-party liability, and the other is coverage for own damage costs. The premium for the former is decided by the Insurance Regulatory and Development Authority of India (IRDAI) and is based on the car’s cubic capacity.

If you have a car with a displacement size of 1000 cc or less, the third-party coverage premium is ₹2,094. If the cubic capacity is between 1000–1500 cc, the premium will be ₹3,416. If the displacement size exceeds 1500 cc, you will need to pay ₹7,897 to obtain third-party liability cover.

When it comes to the own damage component of car insurance, the insurer decides the cost based on the make and model, place of registration, previous driving and claim records, and the add-ons you have opted for.

How Engine Size Affects Your Car Insurance Premium

The cubic capacity of a car significantly affects your four-wheeler insurance premium. Since larger engines produce more power and speed, there is a high risk of accidents, which ultimately results in higher repair costs.

Additionally, larger engines may be fitted in luxury or performance cars, which cost more to repair or replace. In India, insurers also factor in the vehicle’s declared value, usage type (private vs. commercial), and fuel type; however, engine capacity remains a core rating variable under own-damage cover.

Ways to Lower Premiums for High CC Cars

Here are the five factors that can help reduce your high-cc car insurance premium.

Voluntary Deductible

You can opt for a voluntary deductible. Deductibles are basically the portion of repair or damage costs you agree to pay from your own pocket before the insurer covers the rest. When you willingly choose a higher deductible, the insurer transfers less risk onto themselves, leading to a lower premium.

Anti-Theft Devices

Check the Automotive Research Association of India (ARAI) for the approved list of anti-theft devices. These devices almost eliminate the risk arising from the theft of the insured vehicle and reduce the risk of man-made disasters.

Add-on Selection

Add-ons are additional coverage you purchase over the base plan when buying car insurance online. However, not every add-on is required for your insured car. If you drive your vehicle within the city only, you can skip the roadside assistance cover. Similarly, if you plan to sell the car a year after ownership, the zero depreciation cover is not necessary.

Claim History

If you frequently make small claims on your insured vehicle, the insurer may perceive you as a high-risk customer at the time of renewal and charge a higher premium. If manageable, avoid minor claims.

Driving Behaviour

Insurers closely monitor your driving record when calculating premiums. If you have a history of traffic violations, rash driving, or frequent claims, insurers consider you a risky driver and charge higher premiums.

Key Takeaways

When it comes to cubic capacity, it is the sole factor in deciding the premium for third-party liability cover. If you have a car with a larger engine, it offers better performance but comes with higher risks and repair costs, leading to increased premiums. However, you can manage the overall premium cost associated with a third-party liability cover by opting for a higher voluntary deductible, choosing only the required add-ons, and avoiding smaller claims by improving your driving style.

Frequently Asked Questions

How is the insurance premium for third-party cover based on cc?

For third-party insurance, the premium is fixed by the Insurance Regulatory and Development Authority of India (IRDAI) and depends on engine cubic capacity. Larger engines fall under higher premium slabs because they can cause more severe third-party damage in the event of a collision due to their increased power.

Do electric vehicles have cubic capacity?

No, electric cars don’t have a traditional engine or cubic capacity. They run on a battery, and their premium is based on the battery power, denoted in kW.

Is it possible for two cars with the same cc to have different premiums?

Yes, if you are buying comprehensive cover, apart from CC, insurers also consider factors such as car make, model, location, age, and safety features. So, even if two cars have the same engine size, their total premiums may vary.

Do SUVs and sports cars have higher cc and premiums?

Yes, SUVs and sports cars typically come with engines exceeding 1500cc, placing them in the high-premium category. Their performance capabilities, expensive parts, and higher repair costs also increase insurance expenses.

Can I reduce my premium for a high cc car?

Yes, you can reduce your premium by choosing a higher voluntary deductible, installing anti-theft devices, avoiding unnecessary add-ons, and maintaining a clean driving record.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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