Today, insurance is such an accepted and fundamental aspect of the key financial decisions of your lives that it may appear to have existed forever. A vehicle/car/motor/auto insurance protects those who own a car financially, and it also helps to financially support those left behind after someone passes away. Have you ever considered who came up with the concept?
While most people think of Detroit as the Motor City, Cleveland and other Ohio cities were at the forefront of automobile development in the late nineteenth and early twentieth centuries. Gilbert J. Loomis was the first person to purchase an automobile liability insurance policy in 1897, according to the Ohio Historical Society. The policy, which was issued in Dayton, Ohio, covered Loomis in the event that his car caused property damage or hurt or killed someone.
Auto insurance gradually became more comprehensive from that point forward. Automotive fire and theft insurance was originally marketed in 1902, according to the International Risk Management Institute. Insurance firms began integrating property, liability, and fire coverage for cars into one policy in 1912, paving the way for today’s multi-line auto insurance plans.
The Present Scenario
And today, if you live in India, buying a car insurance is a compulsion. It doesn’t matter whether you consider yourself Michael Schumacher and rule the roads with your driving skills, or someone who just takes out the wheels for a ride once in a while for a casual spin, you must be insured by a valid motor insurance policy at all times.
However, a car insurance policy comes with a validity, and it is very important that you keep a close tab to check its expiry date, so you can be ready for your car policy renewal. And if car insurance renewal is something that you’re looking for, you’re at the right place.
So, without further ado, let’s get started with the A-Z of car insurance renewal.
- Car insurance is a specialized insurance policy designed to protect vehicle owners from financial losses incurred because of vehicle damage or theft.
- A new car insurance policy has a specific validity and expires after a certain predefined period as per the policy terms.
- It is mandatory to have a car insurance, so you should always make sure to renew your policy to enjoy the benefits.
How to Know When is Your Renewal Due?
Now that you know a valid car insurance is something you cannot and should not roam the roads without. The next question is how do you check the validity of your car insurance to make sure you do not miss out on your car insurance renewal.
There are various ways in which you can check the status of your car insurance policy and know its expiry date to avoid its expiry and save yourself from any financial and legal hassles. Here are some ways to get going.
- Check out your car insurance policy document for details of tenure and expiry date.
- Call your insurance provider through customer support and enquire about the expiry date.
- Get in touch with your insurance agent and ask about the expiry date by furnishing relevant information about your policy.
- Go to the Insurance Information Bureau’s (IIB) of India website and check the status of your policy.
- Visit the official website of your Regional Transport Office (RTO) and get to know your policy status.
- Visit Parivahan Sewa’s official website and check the policy status.
How to Renew Car Insurance Online?
Every car insurance coverage policy has a validity period, generally ranging from one year to three years or more. Policyholders must opt for car insurance renewal in a timely manner to continue receiving automobile insurance services. Otherwise, their plan may lapse, causing them to lose all of their accumulated benefits and policy coverage.
You can get car insurance policy renewal by any insurer of your preference – be it the one from which you previously purchased your policy or a new insurance provider. So, if you’re looking for car insurance renewal online, here’s how you should go about it.
Step 1: Fill in your car number or enter your car’s make, model, variant, registration date, and the city. Press ‘Get Quote’ and opt for your plan of choice.
Step 2: Choose between a Third-Party Liability Only or a Standard/Comprehensive Car Insurance Policy.
Step 3: Furnish details regarding your previous insurance policy including date of expiry, claims made in the last year (if any).
Step 4: Now, finally your car insurance premium will be generated. In case you’ve opted for a Standard Plan, you can customize it further by selecting car insurance add-ons, setting the IDV and confirming if you have a CNG car. You will then get the final premium value on the next page.
Car insurance renewal is one of the most essential things to do whilst maintain your car. After all, when you’d like your ride to be smooth and ensure that it keeps rolling even amid surprises that roads throw your way. And with car insurance renewal online, you can do this without having to burn a hole in your wallet time and again.
How Does IDV Affect Your Car Renewal?
IDV, heard this term before? Yes/no, we are here to simply all the jargon to help you drive forward. So, let’s get started. Also, we’ll explain this, not with theory, but an example.
The Insured Declared Value, or IDV, of an automobile is the most essential component in setting the cost for comprehensive car insurance. But which is more sensible: raising or lowering the IDV?
The Insured Declared Value (IDV) is the maximum sum insured agreed upon by your insurance provider and refunded to you (the vehicle owner/policyholder) in the event of theft or partial/complete loss. To put it another way, IDV is the estimated current market value of your covered vehicle. This value is calculated using the manufacturer’s current value as well as depreciation depending on the vehicle’s age.
Own Damage Coverage, for instance, is a useful but optional coverage that compensates you if your car is declared fully lost as a result of an accident or natural disaster. Based on the vehicle’s age and cubic size, this charge can range from 2% to 3% of the IDV. Just keep in mind that the higher the IDV, the higher the premium, and vice versa.
It will be practically impossible to arrive at the OD premium if you haven’t calculated the IDV for your car.
A few car owners may now believe that declaring a lower IDV than the market value is the best option. That’s because the OD premium on your car is exactly related to the IDV. The lower the IDV, the lower the premium. A lower IDV may save you money on premium, but it also means you’ll be rewarded with a reduced claim amount in the event of an accident.
Others, on the other hand, may believe that reporting a larger IDV is a good idea, expecting that the claim amount will increase proportionately, or that if they were to sell their vehicle, it would fetch a greater price than the actual market worth. This isn’t always the case, though. In the best-case scenario, IDV is the maximum amount that the insurance company will pay to compensate you for your loss.
The best bet is to achieve an IDV that is close to your car’s market value. Lowering the IDV number lowers the premium, but it also means you’re getting less coverage than you need.
Purchasing auto insurance is a long-term commitment. Furthermore, you may not receive the amount you expect when collecting your insurance benefits. IDV is the main cause for your reimbursements being reduced. As a result, the IDV is the most significant factor to consider before your car insurance renewal.
Cars are treated as liabilities by insurance companies, which depreciate annually and lose value. However, as the policyholder, the IDV is the maximum amount you can claim to cover your car-related damages. As a result, it is your right to protect the correct IDV value for your vehicle. So, always keep your eyes alert for IDV to get the most out of your car insurance policy renewal.
Did You Know
Rowan Atkinson, the actor who played Mr. Bean is said to have the world’s greatest vehicle insurance claim record. In 2011, Atkinson smashed up his ultra-rare McLaren F1 after hitting a puddle. It was originally purchased by Atkinson for $1.17 million SGD, but its worth has since soared to an estimated $6.4 million SGD. For repairs, his insurance company paid out a record amount of $1.7 million SGD. Only 106 McLaren F1s are said to have been produced between 1992 and 1998. It’s no surprise that the repair bill was so high!
Add-Ons to Consider During Car Insurance Renewal
When going in for car insurance renewal, car insurance add-ons are a lucrative option to look out for. However, you need to thoroughly do a cost-benefit analysis and weight the pros and cons of each. You can select the right add-ons for your vehicle insurance renewal based on several factors such as age, geographical location, tyre quality, and more.
So, to make your car policy renewal easy with add-ons, here are some options that we personally like, you might want to give them a thought.
- Zero Depreciation
- Engine Protect
- Return to Invoice
- Tyre Protection
Adding a rider during your car insurance renewal can offer additional coverage and eases out the financial stress causes by the roads. You should always opt for at least one rider option when going for car insurance policy renewal.
What Happens When You Don’t Renew Car Insurance on Time?
Car insurance, as we all know, must be updated every year. Vehicle insurance renewal before the due date is not only vital, but also necessary. Failing to do so may result in not just your insurance expiring, but also a slew of other issues.
To begin, you will need to get new insurance, which will not only be costly, but you will also lose all the benefits from the previous fiscal year. Loosing benefits such as ‘no claim bonus,’ if the policy is not renewed within 90 days of its expiration date, will not be a good experience, believe us!
The good news is that if you haven’t been able to renew your policy in time, you can do it at the last minute from your office desk by choosing for car insurance renewal online.
Also, now that you know car insurance renewal is important, but you still choose to be a daredevil and do try to get away with it, here are some consequences you should be aware of. Don’t say that we didn’t warn you.
- The insurance will lapse if you do not renew it before the expiration date. You are not allowed to drive in India if you do not have auto insurance. Due to your failure to renew your automobile insurance, you may be required to pay a fine to the traffic police.
- The renewal premium is higher than the expiring policy because you lose your previously collected No Claim Bonus.
- Before you can purchase a new policy, you must have your vehicle examined again.
- If you are involved in an accident and do not have a valid insurance policy, you will be responsible for all the costs.
Renewal – Whether to go for New or Existing Company – How to Decide?
Most car insurance policies offer a one-year validity. When it comes to your new hot wheels, car insurance is generally available for a three-year period.
But at the time of car insurance renewal, you can either drive forward with the same car insurance plan or change your insurer. People often wonder if sticking with your existing car insurer is a good idea in the long run. So, here we are to help you arrive at a decision.
|Build a trusted relationship with your insurer
|You might end up paying more
|Get a decrease in deductibles
|The cover might not suffice
|Get accident forgiveness option
|You can get a broader range of service benefits
|No hidden costs or charges
|You might miss out on better deals
|Ease of renewal
|Loosing out on new and better ad-on covers
At the time of car policy renewal, you should make a personal decision about whether you want to keep your current insurer or switch to a new one. Before making a call, you should think about your coverage needs and financial condition. What you can do is examine different policy offerings from different insurers to see if your existing insurance provides the coverage you require at an affordable price. In the end, just make sure that your research is thorough so that you don’t miss out on the best deals for your car insurance policy renewal.
Word to Remember
No Claim Bonus
A No Claim Bonus is a monetary reward given by an insurance company to policyholders who do not file a claim during the policy year. This incentive is accumulated with each year of claim-free service and ranges from 20% to 50%. The cumulative proportion of the benefit gained as NCB results in a discount on the following year’s premium. However, if a single claim is filed between policy years or if the auto insurance coverage is lapsed, the bonus would be forfeited.
Buying yourself a set of swanky wheels is unquestionably a major milestone in life. But you need to pay attention to its needs too! And what better way to show that you care than buy your car an insurance policy.
And showing up car insurance renewal annually without missing out, would definitely mean a lot for your car. So, there’s no reason that you forget about it, especially that you know all the ins and outs of it now.
So, get going with your car insurance policy renewal if you haven’t started already.
Your car model and make
Cubic capacity of your vehicle’s engine
Age of the vehicle
Age of the policyholder
Occupation of the policyholder
Driving history and location
Installation of anti-theft devices
Choosing voluntary deductibles
When going for vehicle insurance renewal, here are some things that you should keep in mind:
Discount on multiple plans
Add more co-passengers
Claim settlement ratio
The right coverage
Offers and discounts
After an at-fault accident, the accident forgiveness option ensures that there is no no increase in your insurance rates.
Based on their own internal rules, car insurance premium rates fluctuate from one insurer to the next. The insurance provider determines your premium based on the following factors:
a) the risk you pose to the insurer
b) the insurer’s operating costs, and
c) the expected amount of money the insurer is likely to pay as settlement over the course of the year
Some of India’s top vehicle insurance companies are Bajaj Allianz, Reliance Car Insurance, and Bharti AXA.