Renewing Car Insurance Policy

Last Updated on February 23, 2024 by Nasir Hanif

Insurance is critical in ensuring adequate financial support in the time of need. Depending on the type of your policy, car insurance covers you against third-party liabilities and own damage. This financial assistance and related services offer great relief during desperate times. A renewing car insurance policy is valid only for a specific period, usually one year. To continue enjoying coverage and benefits, you must renew car insurance on time. In case you forget to do that and your policy expires, renew expired car insurance at the earliest to save yourself from losses—big and small. 

There are mainly two types of car insurance—third-party and comprehensive. Third-party insurance covers third-party liabilities only. Meanwhile, comprehensive insurance covers third-party liabilities and own damage as well.       

Benefits of Car Insurance 

Comprehensive car insurance covers damage due to accidents, natural and manmade calamities, fire accidents, and theft. The coverage is based on the terms and conditions mentioned in the policy document. If you do not renew expired car insurance on time, you will lose coverage and become vulnerable to several monetary losses. Here are some major benefits of having car insurance.

Covers damage to the insured car

A robust car insurance plan covers the repair costs in case the insured vehicle is damaged in a mishap. It could be damaged due to an accident, fire, or self-ignition. Car insurance also covers damage caused when the car was in transit by rail, air or road.

Accident cover

Comprehensive car insurance includes personal accident cover, death cover, and protection against permanent disability cover with a predetermined amount, fixed as per the company’s policy. Renew car insurance on time to enjoy uninterrupted benefits.

Third-party liabilities

This is the mandatory feature of any car insurance. Both third-party and comprehensive insurance cover third-party liabilities. If a third-party person is injured or their property is damaged due to an accident involving your insured car, the expenses will be borne by your insurer. Renew car insurance to keep it valid and it will protect you against legal liabilities such as in case of the death of a third party.

No Claim Bonus

The most important advantage of the renewing car insurance policy is the No Claim Bonus. The insurer rewards you with an NCB discount when you renew car insurance on time. To be eligible for this discount, avoid making an unnecessary or small claim during the policy period. This is a major advantage when you renew car insurance on time.

Factors to Consider When Choosing Car Insurance

Either buy or renew car insurance, but do not do either without considering the following factors:

1. Hassle-free process

The entire process of buying and renewing car insurance should be hassle-free and quick. Amongst the various policies available, choose a policy with a quick and easy purchase policy.

2. Customer support

Customer support is the next vital step when choosing a car insurance policy and company. A good, soft-spoken, reliable staff helps navigate the hassle of buying an insurance policy.

Types of Car Insurance Coverage

There are three types of car insurance coverage:

Collision Coverage 

It covers the vehicle in the case of accidents only. It includes repair expenses.

Personal Injury Coverage 

It covers the owner’s medical bills and hospitalization charges in case of an accident. 

Uninsured Motorist Protection

If the insured vehicle is hit by an uninsured car or third- party driver refuses to pay for the expense of the damage caused to your vehicle, then this type of policy comes in handy.

H2- Why You Should Renew Car Insurance on Time

An expired policy is as good as not having a policy. You must renew expired car insurance when you can or you will have to buy a new policy altogether. Also, to enjoy continuous coverage benefits, renew car insurance before it expires. Here are some benefits of timely car insurance renewal:   

Dodge legal liabilities

Renew car insurance to protect yourself against legal penalties. In India, third-party insurance is mandatory for all vehicle owners. If you are caught driving your car without one, you will have to pay a hefty fine and/or face imprisonment depending on the situation. Failure to renew car insurance leads to the policy’s expiry, which necessitates you to buy a new one. Purchasing a policy takes more time and your car remains unprotected for the period. Hence, renew expired car insurance at the earliest to stay safe. 

To avoid penalties

Sometimes, you may forget to pay your bills such as utility and credit card bills. The delay leads to additional charges called a penalty. In the same way, if you do not renew car insurance on time, you will have to pay extra to renew the policy. Remember, not all insurance companies offer a grace period to renew expired car insurance. Also, once your policy expires, insurance companies may ask you for an inspection of your vehicle before issuing a new policy.

To continue with the insurance provider

There are so many fishes in the ocean. Likewise, there are several car insurance providers in the Indian market. Some policyholders may not be satisfied with the services of their current insurance provider and may want to make a switch. On the contrary, if you have had a good experience with your insurance provider and want to stick with them, then you must renew car insurance on time to continue enjoying the benefits.

Renewal is better than buying a new policy

If your existing plan offers satisfying coverage and the insurance company has a smooth claiming process, then it is better to renew car insurance. Buying a new policy is time-consuming and involves more procedures than the renewal process. Besides, your car remains unprotected for the period between the old policy expiry and the new policy purchase. It also makes you vulnerable to fines and penalties.

To restore the No Claim Bonus

No Claim Bonus is a reward given to you by your insurance provider for not raising a single claim during the policy period. It is given as a discount on the premium amount of the own damage component of your policy when you renew car insurance. The reward starts with 20% for the first claim-free term. The discount percent grows every consecutive claim-free year by 10% and can accumulate up to 50% over five years. You are eligible for NCB only when you renew car insurance within the grace period or before the expiry. If the policy expires, you cannot ask for an NCB discount when you renew expired car insurance even if with the same insurance provider.

Renewing Car Insurance: Why It Matters

Renewing your car insurance is not just a matter of staying compliant with legal requirements; it’s a critical aspect of safeguarding your finances and ensuring continuous protection for your vehicle. Failure to renew your policy on time can expose you to various risks, including legal liabilities and financial losses. Here’s why timely renewal of car insurance is of utmost importance:

Dodge Legal Liabilities: One of the primary reasons to renew your car insurance on time is to protect yourself against legal penalties. In many countries, including India, driving without valid insurance is illegal and can result in hefty fines or even imprisonment. Letting your policy expire means leaving your vehicle uninsured, which not only violates the law but also leaves you vulnerable to financial burdens in the event of an accident or damage.

To Avoid Penalties: Just like missing utility or credit card bill payments incurs penalties, failing to renew your car insurance on time can lead to additional charges. Insurance companies may impose extra fees for late renewals, and some may not even offer a grace period. Moreover, once your policy expires, you may be required to undergo a vehicle inspection before a new policy is issued, further delaying the process and leaving your car unprotected.

Continuity with Your Insurance Provider: If you’ve had a positive experience with your current insurance provider, timely renewal allows you to maintain continuity in your coverage and continue enjoying the benefits and services they offer. Switching insurers may involve additional hassles and uncertainties, making renewal a preferable option for those satisfied with their existing provider.

Renewal vs. Buying a New Policy: Renewing your existing policy is often more convenient and efficient than purchasing a new one. It saves you time and effort, as well as the hassle of re-evaluating different policies and providers. Additionally, the gap between the expiration of your old policy and the issuance of a new one leaves your vehicle unprotected, exposing you to potential risks and financial losses.

Restoring No Claim Bonus (NCB): Timely renewal is essential for preserving your No Claim Bonus, which rewards you for claim-free periods. NCB discounts can significantly reduce your premium payments and accumulate over time, providing substantial savings. However, letting your policy expire means forfeiting this bonus, even if you renew with the same insurance provider later on.

In conclusion, renewing your car insurance on time is not just a matter of convenience—it’s a crucial step in protecting yourself from legal liabilities, financial losses, and unnecessary hassles. By staying proactive and ensuring timely renewal, you can enjoy continuous coverage and maximize the benefits of your insurance policy.

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

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