- Date : 30/03/2020
- Read: 4 mins
Here are some things to keep in mind before you renew your motor insurance policy.
Any vehicle owner would have a fair idea what is motor insurance. However, there are numerous aspects of a motor insurance policy that the average person may be unaware of. To get the best out of motor insurance cover, one should refresh their understanding of it at the time of renewal.
A policy, once taken, remains active for the period of validity. It is generally at the time of renewal that you can make changes and upgrades to it – or switch to a new policy altogether. While renewing a motor insurance policy, there are a few things you should keep in mind. Let’s see what they are.
1. Compare and choose
There are dozens of auto insurers offering a wide variety of motor insurance policies. By searching motor insurance online you will be able to compare these policies. You should compare the policies on as many parameters as possible and not just the premium value. For example, the premium of a particular policy may be less because the Insured Declared Value (IDV) of the vehicle is suppressed when compared to another policy.
2. Know the policy type
Even in case of an existing policy, you should ensure that you have the right type of insurance cover. If you have a third-party insurance cover (the basic requirement), you could opt for a comprehensive plan instead, which provides own damage as well as third-party liability cover. If you have a simple comprehensive plan, consider selecting add-on covers for additional protection.
3. Review the renewal notice
A renewal notice informs you that your insurance policy is about to expire. Not only does it indicate the premium amount; it also summarises important facts like the type of cover, personal details etc. The renewal notice is the primary document based on which your policy will be renewed. So, it is important that you review it carefully and point out any discrepancies to the insurance company or your agent before you proceed to renew your policy.
4. Renew on time
If your motor insurance is not renewed before the end of the validity date, it amounts to a legal offence. Driving an uninsured car is a threat to yourself as well as others. Besides, insurers may charge penalties for non-renewal within the stipulated time. Further delay (generally 90 days) can also lead to lapse of no-claim bonus, with which your premium cost will automatically escalate.
5. Claim the bonus amount
Refer to your policy document to check if you are eligible for any bonus during the previous insurance period. In case of motor insurance renewal, the premium amount gets reduced by the amount you are eligible for as a ‘no-claim bonus’. Bear in mind that you can continue to enjoy your no-claim bonus even when you change your car.
6. Consider add-on cover
Renewal is the ideal time to review add-on covers. You can make all necessary adjustments to your insurance cover at this time. If you have existing add-on covers, it’s worthwhile to reassess their need. For example, you may be highly unlikely to benefit from engine protection cover, which is more relevant in flood-prone areas. Instead, you may consider increasing the base cover of your motor insurance by ensuring a decent IDV for your car.
7. Check the coverage terms
Insurance companies often change the terms and conditions of existing policies or add/change features. Such changes affect the coverage you enjoy, so you should be aware of them. In fact, the insurer is bound to inform you of any changes made. If you are not happy with the features of your existing policy, you may opt for a different one and increase or improve the extent of your coverage. You can also switch your motor insurance policy from your existing insurer to a new one if they offer better coverage terms.
8. Make timely declarations
Just as the insurer is required to update you of any changes in the policy or in the terms and conditions therein, you are also required to provide them with correct and updated information. In case your car has undergone any modification, such as the installation of a CNG kit, your auto insurer must be informed about the same. You may face difficulty in your claims if your declaration is incomplete or not properly updated.
The motor insurance you choose for your car has to meet your unique requirements, which will depend on your budget, location, usage, type of vehicle etc. There is no ‘one size fits all’ solution to motor insurance cover. Therefore, car owners must keep their expectations at the forefront while renewing their motor insurance policy. There are different types of motor insurance policies you should know about. Read this to know in detail.