Key things to consider before renewing your car insurance policy | The Financial Express

Key things to consider before renewing your car insurance policy

Having a good Car Insurance Policy is a must to avail of benefits when required, and renewing it properly is as critical as buying it.

Key things to consider before renewing your car insurance policy
Buying car insurance is an important decision that needs a proper examination of the options available and the add-on covers needed.

Owning a car is much desired by most and one of the first life goals that an individual looks to achieve once he starts earning. As someone has said, ‘Success is hard but maintaining it is harder’, and so is the case with your assets such as cars. Therefore, it is important to have the shield of car insurance in the time of need. Having a good Car Insurance Policy is a must to avail of benefits when required, and renewing it properly is as critical as buying it.

Here are a few things you must consider before renewing your Motor Insurance Policy.

1. Untimely Policy renewal

Timely policy renewals are very important to avail the benefit of the plan/policy in full. Just like with Netflix or Amazon, when you fail to renew, it shows an upgrade subscription sign; similarly, it is with car insurance. A lapsein insurance will expose you to traffic penalties, fines and loss on accumulated benefits.

2. Renewal without considering options

Buying car insurance is important, but buying it after considering the best options available is equally important. Even if a hasty decision was made while buying a policy, this can be rectified during renewal. In addition, knowing all options gives you the opportunity to have good car insurance with a low premium and the best of the features.

Also Read: Debt vs Equity Funds: Which fund is good for investment?

3. Not having the right type of policy

There are majorly two types of policies available for car insurance – Third Party Policy and Comprehensive Policy. In case of improper evaluation of one’s need before taking car insurance, one might choose a policy that turns out to be insufficient. So, it is important to know what policy features you would want to cover and accordingly decide on the insurance policy.

4. Updating Correct Information

Keeping all your information, such as address, phone number, etc., updated with the insurance company is also very important when you want to avail of the policy features. So updating one’s personal info along with ensuring it is correct is equally essential.

5. Making the most of No Claim Bonus

No Claim Bonus gets accumulated when there was no claim raised in the previous year, and this gets gathered as a discount. This can be availed at the time of policy renewal. So, it is very important to check on how much No claim Bonus you are eligible for, and when that is applied, it reduces your renewal premium.

6. Choose the right IDV

Choosing the correct IDV ( Insured Declared Value) is equally important at the time of buying or renewing. Simply put, it is the amount the insurance company is liable to pay you in case the car is lost or damaged. Therefore, lower IDV leads to lower premium and vice-versa. However, an incorrect evaluation can be financially damaging in the time of its need.

7. Use Voluntary Deductible carefully

There is a compulsory amount that you need to pay out of your pocket before the insurance company pays any extra amount. One can pay an extra amount as a “Voluntary Deductible” to lower the premium. However, if any claims are made, then the amount has to be paid out of pocket. So, this needs to be a well-thought decision.

8. Opt for the right Add-ons

Choosing the right Add-on coversis also essential to make your insurance cover comprehensive and capable of supporting you when it is most desired. Some of the good options in this are:

  • Zero Depreciation Cover
  • No Claim Bonus Cover
  • Roadside assistance cover
  • Passenger Cover

Buying car insurance is an important decision that needs a proper examination of the options available and the add-on covers needed. Moreover, renewing it in time while availing the eligible benefits is equally a process that needs focus and proper evaluation. The right advice sought in case of doubt can also prevent wrong decision-making.

(By Venkatesh Naidu, CEO, Bajaj Capital Insurance Broking Ltd)

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 02-11-2022 at 09:00 IST