Petrol vs Diesel: How it Impacts Your Car Insurance & Other Crucial Factors

  • Author :
  • TATA AIG Team
  • Published on :
  • 08/05/2021

Gone are the days when cars were all about running on petrol, and diesel cars were hardly talked about. With time, things have changed, and car manufacturers are now releasing both petrol and diesel versions of their cars.

Car insurance policy: A quick overview

While there are some obvious differences in petrol and diesel cars, having a petrol car or a diesel car will also influence the insurance for your car. However, TATA AIG car insurance has got you covered, no matter the fuel type of your car.

It is mandatory to purchase a car insurance policy in India, irrespective of whether you own petrol, diesel, or electric vehicle. Comprehensive car insurance offers protection to your car in a variety of unfavourable circumstances that lead to vehicular damage. TATA AIG car insurance handles the claim following the policy's coverage, renewal and other terms and conditions.

Driving a vehicle without insurance is illegal. Therefore, you must not only purchase a car insurance policy online or offline, but you must also renew the policy on time before it expires. We enable you to avail of motor insurance online renewal, among other features, which quickens the pace of renewing your policy.

Car insurance: Petrol and Diesel

Below are a couple of points that will clarify how having a petrol or diesel car can affect your car insurance policy:

● Petrol vs diesel engine:

The cost of a vehicle with a diesel engine is normally greater than a car with a petrol engine. This means that the diesel car’s IDV (Insured Declared Value) will also be higher, thus affecting the cost of the car’s insurance. The higher the vehicle's price, the higher the premium payment.

● Petrol vs diesel car maintenance:

Since the cost of repairing diesel-powered cars is higher, your insurance provider is likely to charge a higher premium on your diesel-powered vehicle.

Some important points to consider when choosing between diesel and petrol

Apart from the effect of fuel on your car insurance policy, the following factors will influence your decision to purchase a petrol or diesel car:

● Fuel prices in your location:

The cost of fuel, whether diesel or petrol, varies throughout the world. Even across India, all states will not have the same petrol and diesel rates. Even the time will determine the change in their prices. In general, however, diesel is less expensive than petrol, and you can choose a diesel-run car for a reasonably priced option.

● Fuel efficiency

A petrol-powered vehicle has a higher mileage for short trips, whereas diesel cars are better for longer journeys. So, depending on the extent of your daily commute, you can choose either petrol or diesel-powered vehicle.

● The maintenance costs

A while ago, when diesel-powered vehicles were not so common, these cars had higher maintenance costs. Now, since maintenance is not a major issue, the cost of maintenance for a diesel or a petrol-powered car might almost be identical.

● Your car's resale value

While there are people who change their cars often, there are also those who stick to one vehicle for a long time. If you fall in the first category, you should be aware that while diesel vehicles sold second hand fetch a higher price than cars that run on petrol.

Other factors that influence car insurance premiums include

The cost of the car is not the only factor that influences the insurance premium. There are a number of other considerations that go into determining the rate of premium your insurance company can charge.

● Type of insurance plan

While looking for suitable vehicle insurance in India, you may have noticed that a comprehensive car insurance package is more expensive than a third-party insurance cover. This is because the former provides a more extensive coverage as compared to a basic third-party cover that is only meant to cover third-party injuries or damages.

● Additional coverage

Moreover, a comprehensive insurance policy can be enhanced with the inclusion of add ons. While this does increase your car insurance premium, it is more cost-effective in the long run if there is damage to a specific portion of your car. When you renew your car insurance policy online, you can add or remove certain add-ons which could help your insurance policy.

● Location

Your place of residence or geographical location plays a significant part in determining the premium amount of your auto insurance policy. If you live in a metropolis with plenty of traffic, your premium payments will be higher, while if you live in a smaller town with less road traffic, the premiums will be lower.

● Anti-theft protection

An anti-theft device is a security installation that protects your vehicle from being stolen. Your insurance company will give you a discount on your auto insurance premium if you put one of these devices in your vehicle. This is because your car will then be deemed as incurring less risk, which brings down the premium.

You can install an anti-theft device in your vehicle after obtaining an anti-theft device certificate from the Automotive Research Association of India.

● IDV (Insured Declared Value)

This amount is your car's estimated market value. The Insured Declared Value (IDV) has a direct impact on your premium payment amount since your insurance cover will be based on the IDV. Therefore, be sure to always set the right IDV amount instead of the option for a lower or higher figure.


When it comes to protecting your car from damage, looking for a suitable car insurance cover should be a priority. Depending on the fuel type of your car, you can choose how much coverage you need to safeguard your car.

Quick FAQs to refer to when choosing between petro or diesel cars

1. Are petrol cars cheaper to insure than diesel?

Diesel-powered vehicles are relatively more expensive than petrol-powered vehicles. The cost of a car has a direct impact on the cost of its insurance. The higher the vehicle's price, the higher the insurance premium.

2. What factors affect your car insurance?

The price of the vehicle isn't the only factor that affects the insurance premium. Some variables that go into determining the rate of premium include the insurance plan type, the location, anti-theft protection, and the IDV (Insured Declared Value).

3. Is insurance more for diesel?

Diesel vehicles are a little more costly to insure. Insurers factor in the additional risk of having your vehicle is stolen, as well as the fact that parts and maintenance would be marginally more expensive.

4. What are the advantages and disadvantages of petrol and diesel?

Financially, petrol is less expensive than petrol, and vehicles are slightly less expensive to purchase and maintain. Although CO2 emissions are higher in petrol cars than in diesel cars, they emit less other harmful emissions such as nitrogen. Also, diesel engines are generally quieter.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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