The pandemic has caused the Indian government and several insurance companies to postpone the due date of insurance renewals. It has also resulted in the customers questioning the need to renew their insurance policy.
In case your car insurance policy is about to expire, then do not avoid renewing it altogether or delaying the renewal as it will result in the loss of your NCB, a higher premium of the subsequent policy, and will reflect poorly on your car insurance history.
Top Things to Factor in Before Renewing a Car Insurance Policy
- Legalities to be followed
The Motor Vehicles Act, 1988 mandates that every car owner must have a third-party car insurance policy. It also states that one may drive legally on the roads if he or she has a valid driving license from the RTO, an RC Card, and a valid insurance policy.
Beyond these mandates of law, one may choose to get additional car insurance coverage to ensure 360-degree coverage to one’s own life and property, passenger safety, etc. This would result in choosing own damages cover, comprehensive insurance covers, add-ons such as passenger cover, etc.
- Check if the current coverage is enough or not
The options available are numerous – it is entirely the policyholder’s choice to customize his or her policy to derive maximum protection for the car. The aim must be to secure the car from all-natural disasters such as floods, earthquakes, landslides, etc. as well as protect it from manmade disasters such as vehicular theft, vandalism, rioting, etc.
Additional covers or add-ons, such as Engine protect, NCB Protect, Roadside assistance, and the like, may be considered by the policyholder to enhance his or her coverage.
- Compare insurance plans online
It is advisable to peruse the different insurance policies offered by various insurance companies on neutral websites. If there are any policies that seem suitable to one’s needs, the policyholder must carefully peruse the terms and conditions of the policy and gather as much information of the policy through customer reviews and personal feedback.
One must necessarily assess the popularity of the policy, the reasonableness of premium rates, the claim settlement ratio of the insurance company, etc. to get more clarity about each individual insurance product.
- Look for any possible discounts
Discounts offered by the insurance company are a direct operation of risk that the insurer has to bear. It will also depend on the policyholder’s age, profession, city of residence, driving record, etc. Discounts like- NCB, Voluntary Deductible, Installation of Anti-theft Devices, or Membership of AAI help in reducing the cost of your policy premium.
Let's understand this with the help of an example-Nikhil hasn't raised a claim for the last 4 years, which means he has an accumulated NCB of 45%. The below table will give you a better understanding of the same.
Claim-free years | No Claim Bonus Discount % |
After 1 year | 20% |
After 2 years | 25% |
After 3 years | 35% |
After 4 years | 45% |
After 5 years | 50% |
However, the date of his policy renewal is approaching soon hence, he thought to utilize his NCBs. Thus, he approved his insurance company and asked for a discount on his next policy renewal. So, he got a huge discount of 45%, and that helped him in enjoying the reduced policy premiums for next year.
- Look for the right IDV
The Insured Declared Value (IDV) is the maximum amount that you will get from your insurance company at the time of claim in case of damage, theft or total loss of the insured’s car. IDV is the current market value of your vehicle that also includes the cost of your car’s accessories, after subtracting depreciation value.
It is prudent to get your vehicle insured for the entire IDV. One must choose the most optimum premium for his insurance policy, reflecting the exact market price of your car while choosing a fair premium.
Documents Required for the Renewal of Your Insurance Policy
The following documents must be provided to the insurance company to ensure that the process of renewal of the policy happens smoothly -
- ID proof (such as PAN card/ Aadhar card/ Passport/Photo ID)
- Address proof ( such as Passport/Driving License/ Bank passbook/)
- Passport-sized photograph
- Driving License
- Vehicle registration number and registration certificate
- PUC certificate/Pollution test certificate
- Old car insurance policy number
Conclusion
India has a huge population that drives four-wheelers and each segment of the population has varying needs. With each passing day, the options available are only increasing and one must make a conscious effort to know how to best benefit from these changes.
Stay proactive and renew your car insurance in a timely manner. Avoid any last-minute chaos and peruse the documents carefully to understand the terms and conditions mentioned in the policy document.
