Most car insurance holders do not usually forget to renew their insurance plan as they know the importance of it. But, a few of them may forget either because of their negligence or under certain unavoidable circumstances. However, while renewing your car policy, you need to keep in mind certain factors that can affect your premium and renewal. Today, we are going to discuss each detail that can be considered as a potential component.
Factors To Keep In Mind While Renewing Your Car Insurance Plan
The top 10 factors that can influence your car insurance renewal are as follows.
1. Types of Plans
While you are buying or renewing your car insurance plan, make sure you choose the correct plan that can satisfy your needs. Generally, there are two types of car plans, namely, third party and comprehensive car insurance. The third party plan will only help you to get away from the third party liabilities in the face of an accident, whereas a comprehensive policy will offer you overall protection against almost all the road risks. It is advisable to go with the comprehensive policy as it comes with more benefits and security. However, the premium or renewal amount for a comprehensive car insurance policy is higher than the third party liability plan.
2. Add-on Covers/Additional Covers
While you are renewing your car insurance plan, do check the add-on covers available with your insurer as it offers you enhanced protection and strengthens your policy. Or, if you already have chosen an add-on cover while buying the policy, it would be better if you carry forward that at the time of renewal too. For that, you have to pay a little extra amount.
3. Availability of Cashless Facility
Never forget to check the availability of the cashless facility and the number of network garages available within your vicinity. The cashless facility helps you to repair your damaged car without paying out of your pocket. So, it helps to reduce your financial burden.
4. Compulsory and voluntary deductibles
A deductible is an amount that the insured person has to pay during the claim. While compulsory deductible is unavoidable, in the case of voluntary deductible, it is totally up to you. Choosing a voluntary deductible certainly reduces your premium and renewal amount, but that decreases your claim amount as well. So, choose wisely as per your needs.
5. Insured Declared Value (IDV)
It is perhaps the most important factor. An IDV is a basic amount that is fixed by the insurer on the basis of that year’s current market value of the car, which is provided only if the car is stolen or the total loss of the car. You should not compromise the IDV in order to get a lower premium or renewal amount.
6. No Claim Bonus (NCB)
If you have a claim-free financial year, you are eligible to receive the no claim bonus that is subject to a maximum limit of 50%. But, if you have a lapsed car insurance policy, then you might lose the NCB. It is always important to calculate the NCB correctly at the time of the renewal, even if you have decided to port your policy to another insurer.
7. Claim history of the insurer
It is very much important to check the claim procedure of your insurer because you need your car policy beside you at the time of emergency and crisis, for that only we renew the car plan to keep it active. Most of the insurers have a very smooth claim process, but it may differ from one insurer to another. And also, do not forget to find out the claim settlement ratio of your chosen company, especially in the car/motor insurance sector.
8. Available discounts and portability
Many car insurance providers offer different types of discounts at the time of renewal, such as a discount on own damage, discounts for the members of AAI or WIAA, discounts for the installation of security devices, and so on. This can help you to lower your renewal amount.
9. Compare the premiums online
Before buying a car insurance plan, it is vital that you examine and evaluate the premium amounts of different car plans that are suitable for you. Because this will also affect your renewal amount. Usually, the higher the premium amount is the higher the renewal amount is. But, for lower premium and renewal amount do not settle for that plan, which comes with lesser benefits and coverage and is not suitable for you.
10. Renewal quote factors and lapsed policy
If you have forgotten to renew your ca policy even within your grace period, then your policy will lapse, and you need to revive your policy if your insurer allows that. In this case, the revival quote will differ from the usual renewal quote of your policy depending on all the above-mentioned factors. And also, additionally, you have to pay a fine for that. So, it is better to renew your policy on time regularly to avoid complexities and extra financial burdens.
To sum up the article, it can be said that if you keep in mind the above potential factors, your renewal should be smooth and budget-friendly.