10 Must Knows of Car Insurance Renewals
Published On Jul 18, 2023, Updated On Aug 29, 2023
10 Must Knows of Car Insurance Renewals
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Are you still thinking about whether you should opt for a car insurance policy or not? The answer is YES, and there should be no second thoughts. Car Insurance is not just important because it is mandatory according to the regulations of the government, but it is essential because it protects you from financial and emotional liabilities by covering damages caused by an unfortunate accident.
So, before your current car insurance policy expires, make sure to renew it. If you are wondering where to start from, keep in mind these pointers while renewing your car insurance to save yourself from being fined with extra charges.
Things To Know About Car Insurance Renewals
Before renewing a car insurance plan, there are certain things that you need to keep in mind such as those listed below:
- Plan Varieties - Purchasing or renewing the right car insurance plan is important in order to satisfy the needs it is meant to deliver. Typically, there are three types of car insurance plans available: third-party, standalone own-damage and comprehensive coverage plans. A third-party plan only includes coverage for third-party liabilities in accidents, while a comprehensive policy offers overall protection against various road risks. It is advisable to opt for comprehensive coverage as it covers more benefits and security. The premium or renewal amount for comprehensive car insurance is higher than for third-party plans.
- Additional Coverage Options- At the time of your car insurance renewal, ensure to check for available add-on covers offered by your insurer as they include enhanced protection and strengthen your insurance policy. It is advisable to continue with your old insurance policy during renewal if it includes add-on cover, even though it would include an additional cost.
- Online Premium Comparisons- To save time and renewal amount, it is crucial to compare different online premium plans beneficial for you before renewing your car insurance plan. However, don't settle for a plan with lower benefits and coverage solely to obtain a lower premium and renewal amount, as it may not be beneficial in the long- term.
- Cashless Facility - Before buying car insurance, it is beneficial to verify whether the cashless facility is available and also the number of cashless garages accessible in your area. The cashless facility allows you to repair your damaged car without bearing the expense yourself and reducing your financial burden.
- Deductibles- Compulsory and Voluntary- Deductible is the amount that is paid during a claim. While compulsory deductibles are unavoidable, voluntary deductibles are at your discretion. Opting for a voluntary deductible can reduce your premium and renewal amount but also reduces your claim payout. Therefore, you should choose wisely as per your requirements.
- Insured Declared Value (IDV) - The IDV is a crucial factor to be considered during car insurance renewal. It is the basic amount fixed by the insurer based on the current market value of the car for the particular year, and it is applicable in cases of car theft or total loss. It's important not to compromise on the IDV in order to obtain a lower premium or renewal amount.
- No Claim Bonus (NCB) - If you are to renew your insurance policy and if you haven't made any claims during a financial year, you become eligible for a no-claim bonus, which can reach a maximum limit of 50%. However, if your car insurance policy has lapsed, you may lose the NCB. Even if you decide to switch to another insurer, it's essential to accurately calculate the NCB during renewal as it applies to the vehicle and not the owner.
- Discounts and Portability- There are many discounts that car insurance providers offer during renewal. Overall, these discounts can help you in reducing your renewal amount.
- Renewal Quotes and Lapsed Policies- Forgetting to renew your car policy will result in its lapse, and it will have to be revived, maybe at an additional cost. Therefore, it's better to keep reminders or auto payments mode to renew your policy on time to avoid hefty fines and complexities, which can leave you with additional financial burdens.
NOTE- While renewing your car insurance, it is important to know the right market value of your car as it will help you negotiate better with your insurance provider. Negotiations can save you some money, but for that, you need to know the correct market value of your car to ensure that you are paying the right premium.
A car Insurance policy is not just a legal requirement but a crucial step in protecting yourself from financial losses and damages due to an unfortunate incident. The add-on coverage options should not be compromised for a lower premium. It is advisable to always look for discounts and portability options, such as good driving records, AAI or WIAA membership, and anti-theft device installation. Lastly, prioritise your car insurance renewal to ensure proper protection and peace of mind on the road and in your daily life.
- What documents are required to be submitted as proof for transferring the No Claim Bonus?
Answer- The document required to submit as proof of NCB is a renewal notice from the previous insurer. If this is unavailable, simply call the previous insurer and request confirmation of your NCB or alternatively provide a previous policy copy and declaration that you have entitlement for NCB.
- What is third-party insurance?
Answer- Motor Third Party insurance, also known as Liability Only policy, is mandatory for all vehicles. It provides coverage for the insured's liability against death or injury to a third-party and damage or property.
- What is depreciation in car insurance?
Answer- The unavoidable wear and tear cost of the car's maintenance is called depreciation in car insurance. Your car loses value constantly due to the depreciation involved. The price difference after depreciation and new parts will be borne by the car owner. The car insurance company only covers a portion of expenses incurred to replace the damaged portion of the car, and the rest of the amount is decided based on the cost involved in depreciation.
- Are natural calamities covered under car insurance?
Answer- Any damages caused to a vehicle due to natural calamities like- floods, storms, cyclones, earthquakes, hurricanes etc., are covered under a comprehensive car insurance policy.
- Is it possible to renew my motor insurance policy online?
Answer- One can renew their motor insurance policy online 60 days before expiration. The insurer will send a surveyor to inspect the vehicle. If everything is fine, your car insurance policy will be renewed.