Digital transformation is playing a key role in streamlining the functioning of the insurance sector in India. Due to the shift to the online ecosystem, renewing an online car insurance policy has become much faster and simpler than before. Insurance companies are now equipped to issue and renew insurance policies instantaneously, unlike in the past when you had to wait for a long time to do so.
Although renewing vehicle insurance online is a fairly simple process, there are some common mistakes that you must avoid. Watching out for these issues will not only save you time but will also make the insurance renewal process easy and hassle-free.
How to avoid mistakes during car insurance renewals?
Here is a detailed guide to help you avoid some common mistakes when you renew your car insurance online:
#Step 1: Renew your insurance policy on time
Car insurance policies are valid only for a specific period, after which you must renew them. Also, you must renew your vehicle insurance policy on time. Remember, you run the risk of penalties and traffic fines if you are caught driving without a valid insurance policy.
Certainly, some insurance companies offer you a grace period and give you extra time for policy renewal. Though, it is important to note that your expired insurance policy will not cover your car during the grace period.
# Step 2: Set a suitable IDV for your car
Your car’s Insured Declared Value (IDV) is an important constituent for calculating the premium of both your comprehensive insurance plan and the third-party insurance policy. In addition, the IDV implies the present value of your car and not your vehicle’s invoice value.
The IDV of your car is determined after factoring in its depreciation cost. Moreover, IDV refers to the insured sum that an insurer is liable to pay the policyholder during total loss situations. These include car loss due to theft or irreparable damage.
Now, insurers provide an IDV range to policyholders when they renew car insurance, whereby they can select the IDV amount. Moreover, the IDV value of your vehicle affects both the sum insured and the premium.
While a lower IDV denotes both a lower sum insured and a lower premium, a higher IDV implies a higher sum insured and a higher premium. However, you must avoid both these extremes.
The general recommendation is to opt for an IDV that comes with greater coverage benefits and is within your budget.
#Step 3: Avail the accrued no claim Bonus (NCB)
If you do not file claims during the entire policy period, you are rewarded with a No Claim Bonus (NCB) for your safe driving at the time of policy renewal. You can claim the NCB bonus at the time of renewing your policy, in which case you get discounts on the premium amount.
More so, the NCB bonus goes on accumulating if you do not file claims over the years. This makes it important to check your eligibility for NCB at the time of online car insurance renewal and avail of the specified discount on your renewal premium—all for savings, of course.
#Step 4: Opt for voluntary deductibles
Policyholders have to pay the deductible amount before the insurance provider pays the claim or reimbursement amount. Do you know that in addition to the mandatory deductible, you can opt to pay an additional amount as a voluntary deductible? Yes, by opting to pay a higher voluntary deductible when you renew car insurance, you can reduce the premium amount. Nonetheless, if you make a claim in such cases, you will have to pay this amount separately.
Step 5: Choose the add-ons wisely
Add-on coverage refers to additional protection for your car, although you have to pay more to purchase them. At the time of online car insurance policy renewal, you can opt for the requisite add-on covers. If you purchase any add-ons, you will have to pay more premiums. Nevertheless, with add-on covers, your claim payout increases.
On the flip side, if you do not opt for any add-on, you will not get sufficient coverage.
Some popular add-on covers include passenger add-on, zero depreciation add-on, roadside assistance, and NCB protection cover. Essentially, if your current insurance provider is not offering the desired add-ons, you should consider switching your insurance company.
Now, since you have to pay more premium for add-ons, you must only choose the much-needed ones. It is also important to assess your vehicle insurance requirements and take a balanced decision.
For instance, if you drive your car daily, it makes sense to opt for the roadside assistance add-on. By doing so, you can call for help during car breakdowns and other road mishaps. On the other hand, with a zero-depreciation add-on, you can enjoy the benefit of higher claims because of depreciation cost cancellation. More so, if you mostly drive solo, you do not need a passenger add-on.
By avoiding the above-listed mistakes, you can choose the right car insurance plan and go on to enjoy your ride stress-free. Only make sure you research well and choose the suitable add-ons to get the best deal.