A Helpful Guide For The Renewal Of Car Insurance for First-Timers

Renewal of Car Insurance
Renewal of Car Insurance

Are you about to celebrate the first anniversary of your car? Well, its’ also the time for you to renew your car insurance policy for the first time. Regardless of the country, car insurance policy renewal is mandatory according to the law. Further, if you have purchased it from your car dealer; then, you need to look into it. Sometimes, they conspire you for their commission that they will receive from the policyholders.

Therefore, you should know about the renewal of your car insurance before time. A few factors that would help you learn better are the coverage type, cashless facility, deductibles, and claim procedure. You can even make a switch to the insurer if you’re not satisfied with their policy. If you wish then know about the complete guide for buying new or used spare parts online.

The information is not yet over. There’s more for you to know about the car insurance renewal. So, read the blog and check the helpful guide for the renewal of car insurance for the first time.

What to look at when renewing your car insurance for the first time?

1. Understand your present insurance policy:

First of all, you should have basic knowledge of your car’s insurance policy. So, mainly they are of two types – third-party insurance and comprehensive insurance. The clauses of both the insurance differs.  The third-party insurance plan covers losses/damages that have happened due to third-party; it doesn’t cover your damages. Conversely, a comprehensive insurance plan covers both; third-party and your losses too.

Third-party insurance covers risks such as death/injuries due to accident, damages done by third-party, and personal accident cases (owner-driver both). On the other hand, a comprehensive insurance plan provides coverage for loss/damage to your car due to accident, theft, natural disasters, man-made disaster, and fire.

2. Compare various insurance policies:

After gaining a deep understanding of the types of plans, it will be wise to compare various insurance policies. The very next step you can take is the comparison of the benefits of different car insurance providers. For that, you need to weigh up the premium cost, its coverage, a ratio of claim to settlement, etc.

You don’t need to go door-to-door of various insurance companies to know about their premiums. The digital world is the one-stop solution for all. Various digital portals will help you know about the company and make transactions. Weigh them and determine the one that satisfies your necessities. Remember, the company which you’re choosing should be certified.

3. Get right Insured Declared Value (IDV):

The IDV is the amount after deducting the depreciation value from your car’s current market value. It is the maximum price the insurance company will pay you in case of any theft or loss. When the age of the vehicle crosses five, its value will be fixed. It will be on the consensus of the insurer and policyholder. When the IDV increases, your premium will also escalate, and vice-versa.

Therefore, it is vital to input the right IDV for your car. As your car is merely one year old, it will certainly come near to its original market value. In case you are unsure about it, then consult with your insurance company.

4. Opt for additional coverage:

Yes, you heard it right. Additional coverage is extra protection to your car that covers damages incurred to your engine or consumables. You can consider it as extended protection to your insured car. So, if you have opted for comprehensive car insurance; then only you will have the option of add-ons.

In the beginning, everyone thinks it to be unnecessary insurance and a waste of money. But when your car gives you stress, you’ll realise its significance. Even you can get add-ons that have zero-depreciation cover, invoice cover, etc., to help you protect against uncertainties. So, consider this additional coverage as it will save you in the long run.

5. Verify your policy’s deductions:

Every insurance company will most probably tell you about an important term related to car insurance, and that is deductibles. It includes the bargaining part of the insurer. So, deductibles are categorised into two types – compulsory and voluntary.

Compulsory deductibles are those where you have to pay all the amount from your pocket. On the other side, voluntary also includes the share of the insurer. It will lessen your premium cost to some extent. However, as the name implies, the policyholder ‘may’ opt to pay a certain amount. Hence, verify your deductibles beforehand to avoid shocking news in the future.

6. Check about cashless network garages:

Generally, cashless network garages have a tie-up with the insurance companies. In this case, whenever you meet with an accident or sudden damage to your car, you can repair it in the nearest garage. The cashless cover of yours will cover all the expenses incurred. So, nowadays, insurance companies provide such facilities for your convenience.

Your insurer will settle all your bills once the repairing work is done. Plus, there is no need for you to go and file a claim for it. But remember, not all garages will be having a tie-up with your insurance company, and thus you need to find such closest garages.

7. Is the No-claim Bonus (NCB) included?

Yes, who doesn’t like rewards? As the names suggest, it is the insurer’s reward to the policyholder for not making any claim during the policy year. It is a discount ranging from 20-50% on the premium paid, which is not claimed in the preceding years of the policy. However, when you purchase a comprehensive policy, you generally are not eligible for the discount as, at that time, you will not have any claim-free record.

But after a year, you can claim for it, provided there was no claim in the preceding year. Hence, check with your insurance company whether or not the NCB component is included.

8. Check the claim to settlement ratio:

It is the ratio of a total number of claims settled to the number of claims received in a year. It helps you know the likelihood of your insurance company paying you for your losses. Hence, it should be considered as the most important aspect of your car insurance renewal.

With some insurers, processing your claims and settling can be tricky. Therefore, it becomes highly significant to choose a company that has the best claim to the settlement ratio. You can check the numbers online. This is the best way to stop knocking door of your insurer at the time of claim settlement.

9. Survey about the grace period:

As per the law, there is no grace period after the insurance expires. It all depends on your insurer. Generally, car insurance companies provide a 3 to 30 days grace period to renew your policy. We wouldn’t suggest you depending on this grace period.

Still, if in whichever case, you miss the due date; then, a grace period will be like an oxygen mask for you. Otherwise, the insurer will charge you a fine for the late renewal of your car’s insurance policy. So, survey beforehand about the grace period clause of the insurer.

This was a pocket guide for the renewal of your annual car insurance policy. But there are times where you need to notify your insurer and make the changes in the policy accordingly.

Car Insurance Policy

When should you renew and review your car insurance policy?

After marriage: Marriage changes your relationship status, and thus you should check on the changes in your policy. By doing this, you may find that you will get some discount if you and your partner have policies of the same insurer for your car.

Address change: The change of your address can directly impact your policy premium. You may come to know that there is a change in the risk of a new location, which is affecting your premium. Hence, as soon as you change your address, renew and review your car insurance policy.

Change in the use of your car: Sometimes, it happens that a car purchased for personal use is later used for business purposes. For that, you keep a driver, and he/she drives more often. In that case, you should mention the driver on your policy for which renewal is mandatory.

Many first-timers must be thinking the world has changed, road trips are minimized, so why to spend money on car insurance renewal. If your mind is on the same track, then you will be losing its major benefits.

Which benefits you’ll lose when your car insurance is not renewed?

Lapse of NCB: We have already given you an idea of NCB, so if the insurance expires, there are chances of its lapse.

Claim rejection: In case your car meets with an accident, then your claim will get rejected if now renewed on time.

In summary:

Already the world is dealing with one major health-related problem; we don’t want you to get into any other trouble, so as you. Car insurance is like insurance for your health. This way, you can even maximise your car’s resale value. You will get a good seller with a great amount of money down the road. Hence, bear the above guide in mind, renew your car insurance, and save yourself from a big problem.