What Are Key Factors to Check for Car Insurance Renewal in 2024 to Maximise Coverage?

Car insurance is essential for protecting your financial interests in case of unexpected incidents on the road. Yet, renewing car insurance is often seen as a mundane task, leading many to overlook key factors that can maximise the coverage provided. In 2024, rising repair costs, advancements in vehicle technology, and new coverage options make it crucial to pay close attention when renewing your policy. Here are the essential factors to check during car insurance renewal to make sure you have the optimal protection for your vehicle.

1. Understand the Insured Declared Value (IDV)

One of the most critical elements in car insurance is the Insured Declared Value (IDV), as it represents the market value of your car and determines the sum assured in case of total loss or theft. If your car is older, it’s natural for its IDV to decline due to depreciation. However, choosing an IDV that is too low to save on premiums can lead to reduced payouts in case of a claim. Strike a balance by setting an IDV that closely reflects the car’s market value. Ensuring a suitable IDV will help maximise your coverage while keeping premiums reasonable.

2. Evaluate Different Types of Car Insurance

In India, car insurance policies are broadly classified into two main categories: third-party liability insurance and comprehensive insurance. A third-party policy covers liabilities for damage caused to another person’s vehicle or property, but it does not cover damages to your car. On the other hand, comprehensive insurance offers a broader scope by including own-damage cover along with third-party liability.

When renewing, assess whether the current policy type still fits your needs or if an upgrade would be better. For instance, if your vehicle is relatively new, a comprehensive policy might be more suitable to offer greater protection. You can explore the types of car insurance here.

3. Consider Add-Ons and Riders

Add-ons can be incredibly valuable in enhancing the base coverage of a comprehensive car insurance policy. Key add-ons in 2024 include:

• Zero Depreciation Cover: Eliminates the depreciation cost of parts, ensuring you receive the full value during claims.
• Engine Protection Cover: Offers coverage for engine damage due to oil leakage or water ingression, which is not typically covered in standard policies.
• Return to Invoice Cover: Pays the complete invoice value of your vehicle in the event of total loss or theft.
• Roadside Assistance: Provides assistance in case of breakdowns, towing, and minor repairs on the road.
• No Claim Bonus (NCB) Protection: Allows you to retain your NCB even if you file a claim, helping you maintain lower premiums in the future.

Review the add-ons during car insurance renewal to determine which ones will provide the most value for your specific driving habits and vehicle type.

4. Check Your No Claim Bonus (NCB) Status

A No Claim Bonus (NCB) is a reward for drivers who have not filed any claims in the previous year, resulting in discounts on premiums for consecutive claim-free years. When renewing your car insurance, verify that your NCB is accurately reflected on the policy. An error in the NCB calculation can increase the renewal premium significantly.

In 2024, insurers offer NCB transfer options if you are considering switching providers, enabling you to carry over your accumulated discount to the new policy. This transfer can be beneficial if another insurer provides better coverage or a more competitive rate.

5. Assess the Premium Amount

While it’s essential to ensure maximum coverage, keeping the premium within your budget is equally important. The premium can vary significantly based on factors like the car’s model, age, city of registration, and the policy’s coverage extent. Instead of settling for the lowest premium, look for a balance between adequate coverage and affordability.

You can use online calculators to compare premium quotes across various insurers. Many insurers also provide discounts for car features such as anti-theft devices, which can help in reducing premiums further.

6. Review Network Garages and Claim Settlement Ratio

During car insurance renewal, check whether your insurer has an extensive network of garages where cashless claims are possible. A wide network ensures you can get quick, hassle-free repairs in case of an accident, especially in an emergency.

In addition, review the claim settlement ratio of the insurer. This ratio reflects the percentage of claims settled out of the total claims filed. A higher ratio indicates the insurer is reliable when it comes to paying claims, which is crucial for ensuring peace of mind when renewing your policy.

7. Policy Customisation Options

Many insurers today offer the ability to customise policies based on individual needs. Policy customisation includes the flexibility to choose specific add-ons, adjust deductibles, and opt for limited-duration cover if your driving is seasonal or limited. By tailoring the coverage to your precise requirements, you can avoid paying for unwanted features while maximising protection for the areas you prioritise.

For instance, higher deductibles can reduce premium costs but may require you to pay more out-of-pocket in the event of a claim. Alternatively, seasonal riders can reduce the coverage during certain months, allowing you to save while maintaining adequate protection.

8. Look for Digital-Friendly Services

In today’s fast-paced world, insurers that offer digital policy management services can provide significant convenience. Many insurance companies now offer mobile apps and web portals for policy renewals, claim submissions, and policy modifications. Opting for a digitally-equipped insurer can simplify renewals and offer easy access to policy details and customer support whenever needed.

Furthermore, digital services often come with discounts, as insurers can pass on the operational cost savings to their customers. These digital options can make your car insurance renewal seamless and help you stay updated on the latest policy benefits and add-ons.

9. Review the Exclusions and Terms

Renewal is the perfect time to review the policy’s exclusions, as these are conditions and situations where coverage will not apply. Exclusions vary across providers and policies, so ensure you’re fully aware of what’s not covered under your current policy.

For example, damage due to intoxicated driving or participation in illegal activities are common exclusions. In some cases, modifications made to the car without informing the insurer may also nullify claims. Knowing these exclusions beforehand helps in understanding your coverage boundaries, preventing unpleasant surprises during a claim.

10. Renew On Time to Avoid Penalties

It’s crucial to renew your car insurance on time, as an expired policy leaves your vehicle without coverage, exposing you to financial and legal risks. Driving without valid insurance can result in heavy penalties, and any accident or theft during this lapse period would not be compensated by the insurer.

Renewal reminders from insurers or personal alerts can help prevent lapses, ensuring continuous protection for your vehicle. Renewing on time also allows you to preserve your NCB and avoid the hassle of inspection requirements or documentation for policy reinstatement.

Conclusion

Car insurance renewal in 2024 requires careful consideration of various factors to ensure you maximise coverage while keeping premiums affordable. From reviewing your IDV to selecting relevant add-ons and evaluating policy exclusions, each aspect plays a vital role in determining how well-protected you are on the road. By renewing your car insurance with attention to these key details, you can achieve optimal financial security and peace of mind. Explore more on car insurance renewal options and tailor your policy to match your driving needs for the upcoming year.

Disclaimer: T&C Apply – Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third-party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalam MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer’s website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. URN No. BFL/Advt./23-24/576