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Car Insurance Renewal Checklist: 10 Things You Must Know Before Renewing Your Car Policy

By Vikas Chandra Das
21 July 2022, 11:46 AM

Having an active car insurance policy at all times is a must. If you do not have one and are caught by the traffic police, you will be fined with a heavy amount. Now, that is something you definitely do not want, which is exactly why you should always renew the insurance before the due date! But, what if you are not that happy with the existing policy? Well, you can simply change it if you wish.

Here is the Checklist that You Must Consider to Make the Right Decision -

1. Car Inspection at the time of renewal

There is a car inspection that takes place during the renewal of insurance, based on which the premiums will be decided in the new tenure. If you feel that the valuation, the insurance company is giving, is not right, you may very well look for other options. The idea should always be to get a comprehensive plan but at affordable premium prices.

2. Type of car insurance

The second thing you need to consider is the type of car insurance you want. Let’s say you currently hold a third-party liability car insurance policy but now feel that you should have a more all-round cover. If you were involved in a car accident, where you had to pay out of your own pocket for personal damages, you must have felt the brunt. This is where a comprehensive plan comes into play, which not only covers third-party liabilities but personal damages done to both the cars and to you. Therefore, if you can manage the slightly higher premiums, then this should always be the preferred option at the time of policy renewal.

3. IDV

Insured Declared Value is the maximum amount the company will pay to you based on the current market value of your car. In case your car is over 70% damaged (this may vary from company to company) or is stolen, during any of these instances, the insurance company will provide you the complete compensation. The IDV comes after taking depreciation into account, along with other variables that can differ from company to company. Therefore, you should get the policy that gives you the best quote on IDV at the time of renewal.

4. Add-ons

Add-ons in the cover play a huge role in determining the final price of the premium. It could be things like roadside assistance, engine cover, invoice cover and many more. In fact, you will be bombarded with many such features of the policy at the time of renewal. You need to be smart at this juncture and ensure that you only choose the add-ons that add value to the policy. Never forget that the more the add-ons, the more will be the premium price.

5. Voluntary and Compulsory deductibles

A deductible is the amount of money you will be paying at the time of claim settlement. There is a compulsory deductible that everyone has to pay, and this amount is calculated based on the engine capacity of the car. Then there are voluntary deductibles that are totally in your hand. You can increase this amount as much as you can afford to get the price of the premiums down, considerably.

Basically, deductibles and premium prices have an inverse relationship. Therefore, if you are confident enough not to have to make a claim during the policy term, then you can very well increase the size of voluntary deductibles.

6. Claims

One of the most important things that you need to check in a policy offered by a company is the claim settlement process. If the settlement takes a lot of time to get completed, then it can take a financial toll on you. Therefore, always opt for a policy that has a shorter turnaround time. Moreover, you can always look for cashless policy plans that give an instant settlement. Note that the premiums are slightly higher in this case.

7. Modifications may cost you

If you have made any modifications to the car before renewal, then you need to mention that to the insurance company because this too has a say in the final price of the premiums. Be it the addition of a CNG kit or the new braking system or any change in the engine to improve its performance, this can increase the price of the premium.

  • Bonnet bulges and flared wings will result in an increase of 66% in the premium amount of car insurance.
  • Updated breaks will result in an increase of 36% in the premium amount of car insurance.
  • Turbo or supercharging will result in an increase of 132% in the premium amount of the car insurance.
  • Alloy wheels will result in an increase of 8% in the premium amount of car insurance.

8. Discounts (NCB, AAI membership, Anti-theft device)

Who does not like discounts? This is even truer in the case of insurance. So, always look for the possible discounts that you may get. No Claim Bonus (NCB) is one discount that you should definitely not leave behind if you have it from your previous insurance policy. The best part about NCB is that it can be transferred from one policy to another, so it will stay with you even if you change the insurance company. 

Take a look at the table below to see how NCB works.

Claim-free years

No Claim Bonus Discount %

After 1 year


After 2 years


After 3 years


After 4 years


After 5 years


Let's see how NCB allows you to get a discount with the help of an example. 

Let’s say, Ankita has a car insurance policy for which the premium is INR 16,000. She has 5 years of NCB benefits with her – a 50% discount. As a result, she can enjoy a cut of INR 8,000 after 5 years of this policy renewal, making the total price of premium just INR 8,000, instead of INR 16,000. 

Apart from that, you can get discounts for installing anti-theft devices in your car and by having an AAI membership. While renewing the car insurance policy, do not forget to mention all these points to get substantial discounts on your premiums.

9. Portability

Always opt for insurance policies that enable you to shift from one company to another, even in the middle of your tenure. This flexibility is very important in order to ensure that you have the freedom to discontinue the policy as and when you want.

10. Your findings after comparing policies online

Compare different policies online to get a clear idea of the best bet for you. Once you have done that, you must list out the differences and the key points that stand out in each case. With this piece of information, you can easily understand the best option for you.


Car insurance renewal is inevitable for all car owners, and therefore should be done the right way. Use this checklist to the best effect to ensure that you sign the right papers in the end. Never forget to compare multiple car insurance policies online before making the final decision.

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