Car owners usually treat the insurance renewal process as routine work. They visit the car insurance website, make a few clicks and renew their policies. This is the biggest mistake one can commit while renewing their policy, since this is the best time to switch policies, insurers or increase the amount of sum insured.
It is not uncommon for insurers to keep changing their offerings occasionally. So, the plan that was appropriate for you might no longer provide you with the same benefits and coverage you were expecting. Therefore, while renewing, compare multiple plans from the same and other insurers to find a plan that suits you best.
What Common Mistakes Should You Avoid When Renewing Your Car Insurance Policy?
One of the most common mistakes is not renewing the policy on time. In situations such as these, not only does your policy lapse, but it is illegal to drive without a policy in India. If you cannot show suitable documents, strict legal action can be taken against you.
Besides these, here are the mistakes you should not make while renewing your car insurance policy:
- Choosing Basic Coverage
Never choose only the basic coverage. Though this might keep your premium low, it will fail to give you enough protection. Third-party insurance is the bare necessity, but it does not cover damage to your own car. During renewal, consider your car’s age, usage and risks before deciding on the coverage you need.
- Missing Useful Add-ons
Skipping useful add-ons just to pay less premium can turn out to be costly later on. Therefore, depending on your needs, opt for additional protections such as zero depreciation, engine protection, roadside assistance, return to invoice and consumables cover. Review options and choose carefully.
- Choosing the Wrong IDV
IDV is the insured value of your car. It reduces as your vehicle gets old. So, choosing the wrong IDV can adversely affect both the premium and potential claim amount. A high IDV can increase your premium, while if your IDV is too low, it does not provide enough coverage in case of total loss or theft.
- Failing to Update Vehicle Details
To maintain an accurate policy, always ensure that the vehicle details, along with your personal details, are updated. Update your address, phone number, vehicle information, etc., and provide documents as and when required. This will keep the insurer updated and make the claim process streamlined.
- Missing Available Discounts
When you miss out on available discounts and offers, you can end up paying more than the required amount. Insurers usually provide discounts for eligible safety devices, approved anti-theft systems, etc. So, carefully review the website or check with the insurer before finalising car insurance renewal.
- Using Your No Claim Bonus
If you manage to remain claim-free during the entire policy period, using your NCB benefit helps reduce the premium. The NCB bonus usually increases with consecutive claim-free years. Therefore, before you renew your policy, verify whether NCB is available and if it is accurately reflected in your renewal premium.
- Not Choosing Voluntary Deductibles
Choosing a voluntary deductible can reduce your insurance premium. However, it also increases the amount that you have to pay during a claim. So, you should also not select a high deductible to make your renewal cheaper. Choose an amount that you are comfortable with, without hammering your budget.
Why Reviewing Your Policy Every Year Is a Smart Move?
Reviewing your car insurance policy every year is a smart move because your coverage requirements are bound to change with time. A policy that was appropriate when your car was new will naturally not suit you after a few years of owning that car. Therefore, a yearly review helps keep your policy suitable for your current needs.
So, always check your coverage amount, add-ons, IDV, claim history and NCB benefits during renewal. You can also compare the latest offerings from leading insurers such as Bajaj General Insurance to see whether your existing coverage still matches your needs.
Final Words
Finally, note that car insurance renewal is not just about making a payment before the expiry date. It is an opportunity to review your coverage, check your IDV, add suitable protections, use your NCB and look for available discounts.
Avoiding these common mistakes helps you stay adequately protected without paying unnecessarily. Take a few extra minutes to review your policy and renew wisely.