Car insurance renewal checklist to follow

Posted on: Jan 13, 2020 | | Written by:

Car insurance renewal checklist to follow

Publication date:10 January, 2020, EST READ TIME: 3 MIN

Car insurance policy renewal is important for every car owner. Renewal ensures that you maintain the necessary coverage and comply with legal requirements. Following a checklist of essential steps is helpful to ensure a smooth and hassle-free car insurance renewal process. This car insurance policy renewal checklist provides a comprehensive guide to help you navigate the renewal process efficiently. Following this checklist will help you have the right coverage and make the most informed decisions regarding your car insurance policy.

Whether you already own a car or are about to buy one, it is imperative that you know about the importance of owning a car insurance policy. You not only need to buy the right car insurance cover for your four-wheeler but should also be aware of the car insurance renewal process. Car insurance policy renewal also protects you against all the legal and financial liabilities arising out of damages caused to your car as well as third person or property.

Checklist to Follow When You Renew Car Insurance Online

If your car insurance coverage is up for renewal anytime in the future, then follow this checklist to make the best purchase.

#1: Know the Type of Insurance Coverage you Want

When renewing your car insurance, it's important to consider the type of insurance coverage you want. Here are some common types of car insurance covers available:

1. THIRD PARTY CAR INSURANCE:

Also called third-party liability insurance, this is the basic and mandatory car insurance required by law in many countries. It covers damages caused to third parties involved in an accident, including their vehicles and property. However, it does not cover damages to your vehicle.

In India, third party liability insurance coverage is required by law under the Motor Vehicle Act, of 1988, for all vehicles. It covers legal liabilities arising from injury, death, or property damage caused to a third party in an accident involving your vehicle.

Here are some key features and benefits of third party car insurance:

a. Legal Requirement:

Per the Motor Vehicles Act 1988, all vehicles in India must have at least third party insurance coverage. It is a legal requirement to drive a vehicle on Indian roads.

b. Third Party Liability Coverage:

Third party car insurance covers your legal liabilities towards a third party in case of an accident. It compensates for injuries caused to a third party, including passengers, pedestrians, or vehicle occupants. It also covers property damage caused by your vehicle.

c. No Maximum Limit of Compensation:

In case of third party injuries or death, there is no maximum limit on the compensation amount. The court determines the compensation based on the severity of the injury or loss.

d. Legal Protection:

It provides legal protection and covers the costs of legal proceedings if a third party files a claim or initiates legal action against you.

e. Personal Accident Cover:

PAC covers medical expenses and other related costs for injuries sustained by you and your passengers in an accident, regardless of who is at fault. It may also cover lost wages and other personal injury expenses.

f. No Cover for Own Damages

It's important to note that third party insurance does not cover damages to your vehicle. Suppose you want coverage for your vehicle against theft, fire, accidents, and other perils. In that case, you may consider opting for comprehensive insurance, which provides both own damage and third-party coverage.

When choosing a third party car insurance policy, compare the coverage, premiums, and terms offered by different insurance providers to ensure you get the best value and meet the legal requirements.

2. COMPREHENSIVE CAR INSURANCE

Comprehensive car insurance covers a wide range of risks and damages to your vehicle. It is one of the most popular car insurance policies chosen by vehicle owners.

Here are some key features and benefits of comprehensive car insurance:

a. Own Damage Coverage:

Comprehensive car insurance covers damages to your vehicle due to accidents, collisions, fire, theft, vandalism, natural disasters, and other unforeseen events. It covers the cost of repairs or replacement of your vehicle.

b. Third Party Liability Coverage:

Besides own damage coverage, comprehensive car insurance includes third party liability coverage. It protects you against legal liabilities arising from injury, death, or property damage caused to a third party in an accident involving your vehicle.

c. Personal Accident Cover:

It includes a personal accident cover for the owner/driver of the vehicle. It provides compensation in case of accidental death, permanent disability, or bodily injury.

d. Coverage for Natural Calamities:

It covers damages caused by natural calamities such as floods, earthquakes, cyclones, storms, etc. It helps you recover the repair or replacement costs of your vehicle.

It's important to note that the coverage and features of comprehensive insurance may vary among insurance providers. It is advisable to carefully review the policy terms, conditions, and coverage limits before choosing a policy that best suits your needs.

#2: Choose the Right Add-on Covers

In addition to the basic coverage provided by car insurance policies, insurance companies offer various add on covers that can enhance the protection and coverage for your vehicle. These add-ons come at an additional premium cost but provide additional benefits and coverage options. Keep in mind that it is only at the time of renewals or policy inception, that you have the chance to add or drop add-ons to your base policy.

Here are some commonly available add on covers:

• Zero Depreciation Cover:

This add-on cover ensures you receive the full claim amount without deducting the depreciation value of the car's parts during repairs or replacement.

• Engine Protection Cover:

This cover protects your car's engine against damages caused by waterlogging, leakage of lubricating oil, or any other mechanical or electrical breakdown. It can cover the repair or replacement costs of the engine and its components.

• Return to Invoice Cover:

In case of a total loss or theft of your vehicle, this cover ensures that you receive the original invoice value of the car rather than its depreciated value. It helps bridge the gap between the insured declared value (IDV) and the original purchase price.

#3: Do Not Miss Out on the No Claim Bonus

No Claim Bonus (NCB) is a reward insurance companies provide to policyholders who do not make any claims during their policy term. It discounts the premium amount and incentivizes safe driving and maintaining a claim-free record. Even if you are changing your insurance company or even your car, you can still claim the bonus with the new policy that you purchase.

#4: Renew Car Insurance Before it Lapses

RENEWING CAR INSURANCE before it lapses is essential to ensure continuous coverage and avoid any potential gaps in protection. An expired policy can not only land you in legal trouble but also make you lose out on your NCB. if you do not renew your policy within 90 days of the expiry, you will have to forfeit all accrued benefits.

#5: Analyse your IDV

IDV or the Insured Declared Value, is the maximum sum your car insurer will pay you in case your vehicle is stolen or it gets damaged beyond repair. Simply put it is the market value of your car which is calculated after taking into consideration the loss of value due to depreciation. Your IDV plays a very important role in determining the car insurance premium. When you go for car insurance renewal online your insurance gives you a range within which you can choose the true IDV for your car.

Note: A higher IDV means in case a claim is to be made you may get a higher payout. But at the same time remember that it also means paying a higher premium. On the other hand, while a lower IDV will be lighter on your pocket, you also risk getting a lesser claim amount if need be. Therefore, choose the IDV wisely.

#6: Car Insurance Renewal Online Can Be a Smarter Choice

When you go for car insurance policy renewal, you stand a chance to get the benefits of deals and rewards. Digital payments not only make the premium payment quick and easy but your insurer may also offer some online discounts.

#7: Choose the Deductible Smartly

When going for car insurance renewal, you can choose a suitable deductible. The deductible is your share when a claim is made. Through a deductible, you agree to pay a certain amount or percentage of the claim amount in case a claim is raised. Choosing a deductible can help you lower the premium.

Conclusion

Please note that this checklist is intended as a general guide and may need to be customised based on your specific circumstances. When you undertake the car insurance renewal process, consider your budget, the value of your vehicle, your driving habits, and any legal requirements in your jurisdiction. It's also a good idea to review your existing coverage and assess if any changes or additions are necessary to meet your current needs.

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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