Base Premium: Meaning, Example and How It Works in India

Quick definition

Base Premium is the core insurance cost before add-ons, taxes and discounts are applied.

What does Base Premium mean?

Base Premium is the sum of Third-Party premium and Own Damage premium under a Comprehensive Motor Policy, excluding add-ons, GST and any discounts or loadings. It is the foundation on which everything else is added or subtracted.

For most Indian car owners, knowing Base Premium matters at the moment of buying a policy or filing a claim. The term shows up on the policy schedule, on the claim form and on the renewal proposal, often in fine print that first-time buyers do not notice until something goes wrong.

HiZuno publishes this glossary so that customers and small-business owners can decode the language of motor insurance in plain English. As of 2026, every entry reflects current IRDAI and MoRTH rules and the prevailing practice across providers in India.

How Base Premium applies in India

Third-Party Base Premium is fixed by IRDAI each year by engine capacity. Own Damage Base Premium varies by provider based on IDV, age of car, geographical zone and risk profile. The Indian Motor Tariff sets the framework.

A real-world example

For a Rs 7 lakh car in Mumbai, Base Premium might be Rs 2,200 Third-Party plus Rs 4,500 Own Damage, totalling Rs 6,700. After add-ons (Rs 2,000), NCB discount (Rs 1,000) and GST (18%), the final premium lands around Rs 9,200.

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Common misconceptions

What buyers often get wrong

Buyers compare Base Premium across providers without realising that add-on inclusions and IDV differ. A cheaper Base Premium with a low IDV can be worse value than a higher Base Premium with the right IDV.

Why Base Premium matters for the consumer

Knowing the Base Premium separately from add-ons and GST helps you decode why one quote is cheaper than another and what trade-offs you are making.

Smart Companion tip

Read your policy schedule line by line at issue and at renewal. If a line references Base Premium, confirm the figures match what you discussed during the quote.

How to handle Base Premium in practice

A simple, repeatable approach helps you stay in control whenever Base Premium shows up in your policy paperwork or claim conversation.

Confirm the basics: verify that Base Premium is reflected correctly on the policy schedule before you pay premium.
Cross-check with IRDAI norms: the regulator publishes the framework that governs Base Premium, so compare what your provider has filed.
Read the policy wording: the binding contract spells out limits, exclusions and conditions in detail beyond the marketing summary.
Document everything: keep digital copies of the policy, RC, driving licence and KYC, since most disputes turn on documentation.
Ask before you assume: a 60-second call to the provider clarifies whether Base Premium applies to your specific situation.

Related glossary terms

Frequently asked questions about Base Premium

Is GST included in Base Premium?

No. GST of 18% is added on Own Damage and add-on premium components, not built into the Base Premium itself.

Can Base Premium go down year on year?

Yes, as IDV depreciates the Own Damage base typically drops, partially offset by Third-Party rate revisions by IRDAI.

Does NCB apply to Base Premium?

NCB applies only to the Own Damage component of the Base Premium, not the Third-Party portion.

Are loadings part of Base Premium?

Loadings are added on top of Base Premium to reflect higher risk, such as past claims or specific vehicle modifications.

Is the Base Premium fixed across providers for the same car?

Third-Party Base is fixed by IRDAI. Own Damage Base varies by provider and underwriting view.

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Sources: Content based on information published by IRDAI, ARAI, MoRTH, Parivahan Sewa, General Insurance Council (GIC), and other relevant regulatory or industry sources, as applicable.

Disclaimer: Premiums and amounts shown are indicative and approximate reference figures only; the actual figure varies with the vehicle's age, No Claim Bonus, geography (RTO zone) and various other parameters. The company offers products under Motor, Health, and Commercial Insurance. For risk factors, terms and conditions, exclusions, and product features, please read the policy wording, sales brochure, and prospectus carefully before concluding a sale. Zuno General Insurance Limited | IRDAI Reg. No. 159 | CIN: U66000MH2016PLC273758 | Registered Office: 2nd Floor, Tower 3, Wing B, Kohinoor City Mall, Kohinoor City, Kirol Road, Kurla (West), Mumbai 400070 | Toll-Free: 1800 12000 | Landline: 022 42312000 (Call charges applicable) | Website: www.hizuno.com | Email: support@hizuno.com.

Section 41 of the Insurance Act, 1938: No person shall allow or offer to allow, directly or indirectly, as an inducement to any person to take out, renew, or continue an insurance policy in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out, renewing, or continuing a policy accept any such rebate.