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Did you know your car insurance has a portability feature too?

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Published on April 15, 2021. EST READ TIME: 4 minutes

Imagine, on your 25th birthday, you finally gifted yourself your dream car. And, like any other responsible adult, you purchased car insurance policy to protect your new ride. However, with time, you start to realize that your car insurance policy does not match your expectations. You find yourself in a situation when you realize that you purchased long-term car insurance policy and will have to wait for the policy renewal to make any changes to your cover.

Well, this is precisely where the car insurance portability feature comes in handy. With car insurance portability, a policyholder has the option of switching over to another company without losing the features of the current policy even in the middle of the policy term. While not much is spoken about this feature, should a similar situation ever come to pass, you should know what to expect!

What is car insurance portability?

In its basic form, car insurance portability refers to the ability to switch insurance providers. A policyholder could opt for a switch in insurance provider for multiple reasons, including similar coverage at a reduced premium cost, better value-added services, easier claim settlement procedure etc. In short, if you are unhappy with your current provider, this feature provides the option to find better offers.

One must note that when you port your policy, you will have to consent to the new company's Insured Declared Value (IDV) and premium. However, once you have successfully ported your car insurance plan, the benefits from your previous policy, such as No Claim Bonus (NCB), are carried forward to the renewed policy.

What is the best time to port car insurance?

While there is no restrictive clause on the timing of porting your car insurance policy, it is advised to make the switch at the time of car insurance renewal, i.e. within 45 days of the expiration of your existing policy. This ensures that you avail the benefits from the existing policy such as No Claim Bonus, no vehicle inspection etc.

So, purchase car insurance online from a new company before the expiry date, provide your old insurance details, and the portability will be taken care of without your involvement.

What to keep in mind while porting car insurance?

1. Expiry date of the policy: As mentioned above, if you are looking to switch your insurer, you should start the process at least 45 days before the policy’s expiry date. In case of a lapsed car insurance policy, you lose benefits such as No Claim Bonus, no vehicle inspection etc.

2. Market value of your car: Your car, due to numerous factors, depreciates with each passing year, affecting the premium you pay. Thus, when you are looking to switch your insurer, ensure you check the current IDV or the Insured Declared Value of your car as that will change your premium from the current policy.

3. Online policy comparison: Before you settle for an insurer or policy, it is advised that you do your research well. The exercise of going online, reading reviews, and comparing premiums offered by various insurance companies ensures that you are making an informed decision and not falling for fraudulent claims.

4. No Claim Bonus (NCB): Insurance providers reward you with a No Claim Bonus if you do not file a claim for an entire year or more. For each year you do not claim, you can get discounts on the premium at the time of renewal. While making the switch, ensure that NCB benefits from your existing policy are transferred to the new policy.

5. Claim settlement ratio: An insurer’s ability to settle the maximum number of claims filed for a year determines the company’s financial stability and its after-sale service. Let’s say the higher the ratio, the better the insurer. Thus, before deciding on an insurer, always check the company's claim settlement record for at least the past five years. A good practice would also be to check its other offerings such as number of cashless garages, range of add-on covers etc.

6. Documents required: At the time of switching the insurance company, there are several documents from the previous insurer that you should keep handy. The new insurance company would require a vehicle registration copy, previous policy copy, identification documents such as Aadhar and Pan Card. The company would also want to know the claims history to calculate your No Claim Bonus (NCB).

What are the advantages of car insurance portability?

Portability is a useful feature because it helps you change car insurance providers with your discounts and bonuses. Some of the advantages include:

1. Ability to move to a better insurance provider: By opting for car insurance portability, you can move to a company with a larger network of cashless garages and a better claim processing record.

2. Ability to carry over No Claim Bonus (NCB): This is the biggest advantage of car insurance portability. If you do not file a claim during an insurance year, you can get a discount on the premium at the time of renewal. If you opt for car insurance portability, this NCB would be carried over.

3. Ability to get better add-ons: You may not be able to get the add-on covers you require under your current comprehensive car insurance policy. But portability offers you the opportunity to switch over to insurers that have a range of add-on covers that could be beneficial for your car.

Conclusion

Motor insurance is an essential aspect of car ownership. Car insurance portability allows you to move policies without losing any benefits accumulated under the previous policy. So, if you are dissatisfied with your current policy, you can search and select the right car insurance online.

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

This blog has been written by:

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry, S. Gopalakrishnan is a name to reckon with in the field of reinsurance; he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on the latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

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Few Other Articles:

• 5 benefits of car insurance

• Tips to reduce car insurance renewal cost

• Know your insurance your ultimate guide to car insurance premium

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