Here’s all you need to know about renewing your long-term car insurance

Posted on: Sep 23, 2021 | | Written by:

Here’s all you need to know about renewing your long-term car insurance

Published on September 22, 2021. EST READ TIME: 3 minutes

All about long-term car insurance renewal- Car Insurance

Car insurance is a mandatory requirement for you to be able to drive on Indian roads. However, insurance coverage across the driving population is still inadequate, resulting in out-of-pocket expenses even for the fault-less party involved in accidents. This is the reason why long-term car insurance was introduced to ensure that more vehicles are covered, for longer, at any given point in time.

Back in 2018, a Supreme Court committee observed that nearly 66% of on-road vehicles were uninsured. Accidents involving these cars, particularly the victims, were adversely affected since it meant paying out of their own pocket or using their insurance coverage to pay for damages that were not their fault. Moreover, those who died were not getting adequate compensation since the vehicles weren’t insured. To eliminate this problem, the Court made it mandatory for new vehicles to buy long-term bundled insurance – 3 years for four-wheelers and 5 years for two-wheelers.

However, in practice, it was found that it increased the upfront cost for potential car buyers, and there was also room for mis-selling.Hence, the order was withdrawn. So now, for new vehicles, long-term third-partyinsurance is mandatory, whereas the own damage component can be renewed annually. Your insurance tenure depends on when you bought your vehicle. To know more and renew your policy easily, read on.

Vehicle bought on or after 1st August 2020

Mandatory long-term third-party insurance and single-year own damage cover. The NCB will accrue annually.

Between 1st September 2018 and 31stJuly 2020

You would have bought a long-term third-party policy which will now migrate to an annual third-party insurance. If you had bought a bundled policy of 3 or 5 years, then the own damage component will also be renewed annually. The accrued NCB over 3 or 5 years can be used at the time of renewal.

Vehicle bought before 1st September 2018

This has practically remained unchanged. You can continue to buy third-party and own damage cover annually.

How to renew your policy?

The first batch of long-term car insurance policies are up for renewal in 2021. By now, almost all insurers have an online presence. So, renewing your policy is even easier than buying a fresh one, since it requires fewer steps, and the KYC has already been undertaken. Here’s what you need to do:

1. Visit the insurer’s website

2. Select the plan of your choice

3. Fill in key, basic details

4. Make the payment

5. You’re insured!

Alternatively, you can renew your insurance policy offline. Visit the branch office of the insurer and fill out the application form. Carry key documents with you and make the payment to get insured.

If your policy has expired already, then a surveyor may be sent by the insurance company to assess the vehicle. You may be required to submit pictures of the vehicle from various angles as well.

Make sure you do your research before renewing your plan. Since you would be with an insurer for about 3 or 5 years, especially for the long-term policy, choose a reputed insurer with a high claim settlement ratio and benefits.

The general benefits of long-term car insurance

1. Fewer hassles

Given that third-party insurance is mandatory, you will be covered for longer, not requiring yearly renewals.

2. Lower overall cost of insurance

While the upfront cost is higher, the upside is that the total cost of insurance is lower than what you would have had to pay if you had renewed it yearly.

3. Protection against price hikes

The third-party insurance price is determined by the IRDAI every year. You are protected against any potential price hikes if you’re on a long-term car insurance plan.

Conclusion

To wrap up, since India is still grappling with underinsured and uninsured drivers, long-term car insurance is one of the best ways to tackle the problem. It will be cost-effective for you as well, as explained above. Plus, it will hardly take any time or effort to renew car insurance policy online.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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