In India, the law mandates third-party insurance cover for all vehicles, with the penalty for non-compliance being a fine of Rs 2,000 along with potential imprisonment for three years.
Usually, car owners renew their insurance with the same insurance provider without considering other options. But it may or may not be a wise decision.
Says Kevin Menezes, executive director, PolicyBoss: “In case you are happy with the services offered by your current insurer, simply check for the depreciation in your car’s Insurer Declared Value (IDV) and choice of add-ons you have made.”
1] Bargain For Lower Premiums And Choose Right Cover
When renewing your car insurance, don’t accept the quoted rate blindly. Bargain for a reduction in premiums while seeking better coverage. Assess your vehicle’s age and value. If you have a new, expensive car, you should preferably opt for comprehensive insurance coverage covering both Own Damage (OD) and third-party (TP) liability. But as your car gets older, third-party liability cover might just suffice, thus allowing you to save on premiums by skipping the OD cover.
OD coverage may have a shorter tenure than TP cover, so knowing the policy dates can prevent extra charges during renewal.
Says Subhransu Pattnayak, senior vice president and national product head-personal lines underwriting at Liberty General Insurance: “The policy should be renewed on or before the expiry date of the previous policy. This might attract additional privileges in price, and the insured can avoid the physical inspection of the vehicle, which will save a lot of time for the customer.”
2] Explore Usage-Based Policies
Some insurers offer usage-based policies as well, which take into account factors, such as driving behaviour and mileage. The above-mentioned comprehensive policies can also come in the form of a usage-based policy, where you will pay premiums based on the kilometres run. The driving behaviour and mileage will also be considered, and it can benefit safe or occasional drivers with lower premiums.
3] Consider Add-Ons
Consider whether additional coverage is necessary than what you currently have.
“Irrespective of your choice of insurer, some important add-ons one should opt for are zero depreciation, road side assistance, engine cover, consumables cover and tyre cover,” says Menezes.
Some of the popular add-ons are
A] Engine Protection Cover: This is most beneficial for flood-prone areas. This coverage can help you if your car’s engine suffers damage from water ingression or leakage of lubricating oil. Typically the engine protection cover will cover the cost of repairing or replacing engine, including connecting rods and crankshaft.
B] Roadside Assistance: If you drive frequently, even out of the city, then evaluate the cost benefits of including roadside assistance, which could prove to be of immense help in emergency situations. It will cover flat tyres, dead batteries, and fuel assistance, thus providing you with professional on-site help. It can also provide you with towing service to take your car to the nearest repair shop in case of a breakdown.
4] Choose The Right Insurer
According to Pattnayak, it would be best to check for the claim settlement ratio (CSR) of the insurance provider.
“Higher CSR indicates that the insurance provider is quick with settling claims and offers an overall good quality of service,” Pattnayak says.
Also find out fast they settle claims (Turnaround Time) and if they have many pending cases, adds Menezes.
“You could also check for the claim process and ease of claims for the insurers you have shortlisted, as today claim experience has been digitised to offer both convenience and faster settlement by insurers,” he says.
As a safe bet, choose policies and companies that allow self-inspection during claims. It’s easier – you can use your phone to share damage pictures and videos, skipping the need for an insurance company staff to visit the site.