Motor insurance plans are time-bound contracts that provide coverage for a specified duration. This specified duration is called the policy tenure. At the end of each such tenure, it must be renewed to keep the coverage active for subsequent periods.
As a motor insurance policy is a mandatory requirement by the Motor Vehicles Act, it is necessary to buy at least third-party coverage. However, you can also upgrade to a comprehensive cover. The policy coverage need not be decided from the start, but also can be modified at the time of renewal. * Standard T&C Apply
Here are a few others tips to remember when renewing your motor insurance policy:
- Setting the correct IDV
When renewing your motor insurance plan, it is crucial to review your policy’s IDV. Insured Declared Value or IDV is the maximum compensation that the insurance company pays in the event of a total loss or damage or in situations of theft of your vehicle. Since the IDV determines the total risk which the insurance company must underwrite, it also has a direct bearing on the premium calculation. *
At renewal, you might be allured to buy a policy that offers lower premiums. But more often, these low premiums have a lower IDV covering your vehicle. Compromising on IDV may not be a good idea as financial loss is the ultimate result of it in a situation when your vehicle cannot be repaired or is stolen. *
- Ensuring NCB benefits
In case you have purchased comprehensive motor insurance, No-Claim Bonus (NCB) benefits are available during the motor insurance renewal. These NCB benefits are offered by the insurance company when you have not filed any claim during the previous policy period and are calculated as a percentage of the own-damage premium. Thus, for every consecutive claim-free policy period, this benefit goes on increasing. It starts at 20% and increases up to 50% after five consecutive claim-free policy periods. So, at every renewal, you must ensure your insurer has provided you with the appropriate concession in your own-damage premium by way of NCB. * You can visit the official website of IRDAI for further details.
- Reassessment of add-on covers
Other than the standard motor insurance plans, an add-on is a feature you can opt over and above the insurance coverage that helps provide an all-round protection. Since they are optional policy features, they tend to increase the premium too. While there are several add-ons to choose from, reassessment of add-ons at renewal helps keep your premiums in check by eliminating unnecessary ones and adding those that are necessary to your policy. *
- Evaluating the deductible in your policy
At renewal, you can also opt-in or opt-out of deductibles in your policy. There are two types of deductibles — compulsory and voluntary deductibles. As their title suggests, the compulsory deductible is mandatory for all vehicles but the voluntary deductible can be selected at will. Choosing the voluntary deductible in your insurance cover impacts the premium and the amount that you are required to pay from your pocket at the time of a claim. To decide whether to increase or decrease the voluntary deductible, you can also use a motor insurance calculator. *
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.