Renewing your car insurance is a crucial step in ensuring the continued protection of your vehicle and financial well-being. Additionally, it is a compulsion by law to have an active car insurance policy as per the Motor Vehicles Act of 1988.
However, with numerous insurance providers and policies available in India, it's important to consider various factors before making a decision. Here are the top 10 factors to consider when renewing car insurance in India.
1. Coverage Options
Evaluate the coverage options provided by different insurance companies. Car insurance policies typically offer two types of coverage: third-party liability and comprehensive. Third-party liability covers damages caused to others in an accident. A comprehensive car insurance policy includes both third-party liability and damages to your own vehicle. Consider your needs, the value of your car, and the potential risks when selecting the most appropriate coverage option.
2. Policy Benefits
Examine the additional benefits offered by the insurance policy. Some insurers provide features such as roadside assistance, cashless repair services, and personal accident cover for passengers. Assess these benefits and choose a policy that aligns with your requirements, providing maximum value for your money.
3. Insured Declared Value (IDV)
The Insured Declared Value is the maximum amount the insurance company will pay in case of a total loss or theft of your vehicle. When renewing your car insurance, verify that the IDV mentioned in the policy is accurate and reflects the current market value of your car. A higher IDV might lead to a higher premium, but it ensures better compensation in case of a major loss.
4. No-Claim Bonus (NCB)
NCB is a discount offered by insurance companies as a reward for not making any claims during the policy term. It accumulates over the years and can lead to substantial premium reductions. When renewing your car insurance, check if you are eligible for NCB and how much discount it offers. Ensure that you retain the NCB even if you switch insurance providers.
5. Add-On Covers
Add-on covers provide additional protection beyond the standard policy coverage. Examples include zero depreciation cover, engine protection cover, consumables cover, and return to invoice cover. Assess your specific needs and consider adding relevant add-ons to enhance your insurance coverage. However, be mindful that each add-on comes with an additional premium.
6. Deductibles
A deductible is the amount you need to pay out of pocket before your insurance coverage kicks in. It is important to understand the deductible amount mentioned in the policy and evaluate if it is feasible for you in case of a claim. Opting for a higher deductible can lower your premium, but ensure that you can afford the deductible amount during a claim.
7. Network of Cashless Garages
Insurance companies have tie-ups with a network of garages where you can avail cashless repair services. Check the list of cashless garages provided by the insurer and ensure that there are suitable garages in your vicinity. A wide network of garages ensures convenience and quick settlement of claims.
8. Claim Settlement Ratio
The claim settlement ratio of an insurance company is determined by the number of claims that are received vs. the number of claims that are settled. It is a crucial factor to consider when renewing your car insurance. A higher claim settlement ratio indicates a higher probability of your claims being settled smoothly and without hassle.
9. Customer Service and Support
Good customer service is essential for a smooth insurance experience. Research and read reviews about the insurer's customer service, responsiveness, and ease of claim settlement. A proactive and customer-oriented insurer can provide prompt assistance during emergencies and streamline the claim process, ensuring a satisfactory experience.
10. Premium Cost
Compare the premium costs offered by different insurance providers. Obtain quotes from multiple insurers and analyse the coverage and benefits offered at various price points. You can do this with the help of a car insurance premium calculator. Focus on the coverage you need, but also keep in mind that paying too much or too little for inadequate coverage will be a dissatisfactory experience.
In Conclusion...
Since motor insurance is mandatory by law, having your car insured is important. Moreover, you can continue to access its benefits and coverage for yet another policy year. It is one of the best financial backups in times of car-related emergencies, right from road assistance to accidental damage coverage.
However, rushing into renewing your car insurance policy without much thought can be counterproductive. It is highly beneficial for you to make this decision carefully since various factors such as premiums, depreciation, deductibles, bonuses, etc. impact your policy. Hence, considering all these factors before choosing your ideal policy and insurance provider during renewals can be helpful.
