For most people, renewal of car insurance is just to click on the link sent by your insurer and pay the premium again. But is it the right approach? Of course not. There's a misconception that you only have to pay attention while buying car insurance for the first time. However, the statement is partially true that you should consider various things while purchasing car insurance. But there are many things to consider even when you renew your car insurance. So, in this blog, you'll learn five important things you should keep in mind while having the renewal of car insurance.
Five things to remember while renewing your car insurance
1. When to renew car insurance?
Forgetting to renew car insurance is very common in India, and maybe globally as well. However, that's not a good habit for two main reasons. Firstly, renewing the car insurance after the prior one expires can increase the premium cost. So, it's an economic loss for you. Secondly, a car with no insurance is illegal to drive. Thus, you can get a fine from traffic police while driving your car. Also, if you get into an accident by chance, you cannot claim a single rupee as you do not have any car insurance.
So, when to renew car insurance? You should renew the car insurance policy before it expires. Renewing your car insurance on the expiration date is also fine, as you'll still get a great value.
2. Reconsider the type of plan
You shouldn't blindly renew your car insurance on the same plan repeatedly. There are two types of plans that you can choose for your car: comprehensive plan and third-party plan. As per law, the third-party cover is mandatory and comes at a cheaper price. However, being cheap also means missing out on various comprehensive plan features, like Own Damage and other components.
So, the tip is to look at your car's age before the renewal of car insurance. If you have a new car or your car isn’t very old, you should choose a comprehensive cover as it will also cover the damage to the car in case of an accident or theft along with the third party cover. But if your car has aged so much that your Insured Declared Value has decreased significantly, then a third-party cover is a better option.
3. Check the IDV to make negotiations
You may think that you can't make negotiations on what is being offered by the insurer, but it's not true. The premium that the company asks for may not be the best offer, and you will have to make negotiations. But how will you make these negotiations?
First, you should ask for the car's IDV or Insured Declared Value that your insurer is providing. It is the value you'll get if your car gets damaged or stolen. Now, this value, as mentioned above, decreases as the car gets old, so your premium should not be so high that insuring your car becomes a bad deal. Thus, negotiate for a better premium price.
4. Check for the No Claim Bonus
When you buy car insurance, and no claims are made until it expires, you are rewarded with a No Claim Bonus. This No Claim Bonus is credited in the form of a discount. The discount for the first year starts at 20% and goes up to 50% if there's no claim made for five consecutive years. So, you must check if this discount is added to your final insurance price if you didn't claim the last insurance.
5. Add the necessary add-ons
Now, since a No Claim Bonus can be a discount as huge as 50%, losing it for a claim for minor damage is not a great deal, right? But is there any way that you can claim these minor damages without losing the NCB? Yes, you can include an NCB protection add-on to your insurance.
Moreover, there are many other add-ons as well, which can help you save money when you renew your car insurance. Some of the best add-ons to have at the time of car insurance renewal are zero depreciation and engine protection.
Bottom Line
These are the things to remember when you renew your car insurance. By ensuring these things, you can save significant money on the renewal of car insurance. However, you should note that saving money should be limited to non-important expenses.
For instance, you shouldn't use a third-party-only cover if you have a new car. Similarly, make sure to have the necessary add-ons on board, as they can save you money when you renew the insurance again or claim the insurance.
