Basic Mistakes to Avoid When Renewing Your Motor Insurance Policy
A new vehicle comes with its benefits, but also added responsibilities like an insurance. No vehicle owner can skip the motor insurance compliance. While your vehicle dealer may offer a standard motor policy of one year, it needs to be renewed thereafter. Hence motor insurance renewal must be done well in advance so that a continued coverage is available. But for someone renewing their policy for the first time may seem to be daunting. This article explains some of the mistakes that you can be avoided in renewing a motor insurance policy.
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Not making use of NCB
NCB or no-claim bonus is the benefit provided to policyholders by the insurance company. The policyholders earn this benefit by not making claims during the previous policy year. At the time of renewal, this no-claim bonus can be claimed thereby lowering the renewal premium. However, it is essential to note that NCB concession is only available on the own-damage component. Thus, standalone own-damage and comprehensive policyholders can take advantage of this benefit. Moreover, this benefit starts at 20% and goes all the way up to 50% for consecutive claim-free policy years. Such benefit is available for a period of 90 days after expiry, thus when making bike or car insurance renewal, avoid a delay beyond this period to take full advantage. Please visit the official website of IRDAI for more details.
Not selecting an adequate IDV
Motor insurance purchase often contains jargons and IDV is most important of the lot. It is that amount which the insurance pays as compensation in the event of complete damage to the vehicle. While insurance companies have pre-determined IDVs based on the class and type of vehicle, policyholders can still choose to modify it. Many opt for a lower IDV as it directly impacts the premium. But it results in a lower compensation for such uncertain events of damage beyond repair. Thus, it is essential to not lower the IDV, but instead opt for an adequate amount which offers the required coverage. * Standard T&C Apply
Not determining add-on requirements accurately
A comprehensive plan not only offers own damage cover along with the mandatory third-party insurance, it also offers the facility to customise the coverage. It is possible with the help of add-ons. Add-ons are optional policy features that can be opted by policyholder. But not all add-ons are of use to a buyer. Some add-ons may not add any significant value. Hence, it is important to carefully assess the requirement of add-ons and then only purchase them. As they are optional features, they increase the premium too. Hence, it is important to buy only the ones that significantly enhance the policy scope.
Skipping on informing about modifications
Any modifications made need to be informed to the insurance company. This makes the insurer aware of the changes made so that any change in risk can be determined by the insurer to adequate base the premium. Any failure to inform about such modifications may lead to rejection of the claim application and thus should not be skipped.
With these mistakes elucidated above, precaution can be taken during car or two wheeler insurance renewal. Also, please bear in mind that insurance is the subject matter of solicitation. For more details regarding features, what’s excluded, terms, conditions, please read the brochure/policy wordings carefully before finalizing a sale.