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Car Insurance April 4, 2020
Car Insurance policy is mandatory under the Motor Vehicles Act. If you own a car, you are required to buy a car insurance policy. Car Insurance policy can be brought for a year or for three years period and can be renewed after the expiry of the said one year or three years as the case may be. Under the Motor Vehicles Act, Car insurance policy is required to be brought mandatorily for a term of one year and can be renewed every year. However, with respect to 1st Sept, 2018 any car brought on or after 1st Sept 2018 the car owner is required to buy a car insurance policy compulsorily for a term of three years. Renewal of the car insurance policy should be done on or before the due date for the renewal of the policy otherwise the insurance policy will lapse. At the time of renewal of the car insurance policy, the policyholder should review the insurance plan and make changes as required to minimise the losses in future and maximise their gains out of the car insurance plan.
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A car insurance plan once opted is active for the period of its validity. It is at the time of renewal of the insurance policy you can upgrade and make changes in your insurance policy or choose to switch to a new car insurance policy altogether. At the time of renewal of a car insurance policy there are certain things that you should keep in mind. Let’s check what they are.
There are many insurance companies offering wide variety of car insurance plans. You can compare car insurance policies online. You should compare the insurance policies on various factors and parameters and not just on the value of premium. If you find any other car insurance policy suitable with wider coverage at affordable premiums on comparing then you can switch to that insurance plan at the time of the renewal to maximise your gains in the future. Further you can also opt to change your policy type at the time of renewal of the insurance policy such as if you have a third party insurance policy and want wider coverage you can opt for a comprehensive car insurance policy or vice versa.
If you do not renew car insurance policy on time or before the end of the validity period of the insurance policy then it will amount to legal offence. Also, penalties are charged for non-renewal of the insurance plan with the time stipulated for it. Further delay beyond 90 days will lead to lapse of your no-claim bonus if any leading to higher premium cost. Your coverage will also terminate if you do not renew your car insurance policy on time which may lead to paying the damages caused during the period of termination of the coverage from your own pockets. As the damages during such period will not be covered that might lead to high financial losses.
You should refer to your policy document to check your eligibility of no- claim bonus during the previous policy years. The bonus is offered from 10% to 50%. At the time of the renewal of the car insurance policy, the premium for the insurance policy is reduced by the percentage of the no-claim bonus. You should keep in mind that you can use your no-claim bonus even if you change your insured car. You can also look for other premium discounts that may be available at the time of renewal of the car insurance plan such as discount if you buy online, or discount for higher sum insured, etc
When you are renewing your car insurance plan you can choose to add any of the add-on cover with your insurance policy which you think you may require. Add-on covers enhance the coverage of the car insurance policy and if you secure your car with additional benefits covers such as zero depreciation cover, engine protection cover, hydrostatic cover, etc you can minimise your losses in future. Renewal is the right time to review the various add-on covers. You can make adjustments in your add-on covers at the time of renewal. If you do not need an add-on cover you can remove it and add the one you need as per your current situation.
Insured Declared Value is the amount that the insurance company fixes for the current year market value of the car which is to be provided if the car is stolen or suffered a total loss. You should not insure your car for lower IDV to decrease your premiums on the renewal of the insurance plan. IDV is the amount that the insurance company pays on the car being completely damaged or stolen. Decreasing your IDV for decreasing the premium on renewal may lead you to increasing your losses. You should get the insurance policy on the full value of IDV of the car to maximise the gains.
In order to get the best of car insurance policy, you should opt to refresh your understanding of car insurance at the time of the renewal of your insurance policy. One should also check the terms of the coverage of the insurance policy and review the renewal notice served by the insurance policy which helps them to make timely declarations and review the insurance policy for their car for the further period. It is advised to keep the above mentioned things in mind while you are opting to renew car insurance policy so that you can minimise loss and maximise gains.
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