6 Things to consider when you renew car insurance

How to effectively Renew your car insurance?


Car insurance renewal is not a one-time process. You need to renew the policy in order to keep the coverage intact irrespective of its tenure. In this article, we will shed light on certain factors you should revisit while renewing the policy.

Things to consider when you renew car insurance

1)      Type of Policy

One of the most important reasons to consider is the type of car insurance policy you need especially if your existing policy is the basic one. As you might already be aware – there are two types of car insurance policies. One is the third party car insurance policy and the other is a comprehensive policy. If you currently have a third party car insurance policy, you may be underinsured. This is because any damages to your car are not covered under this policy. When you renew car insurance, consider switching to a comprehensive policy as you will then get access to a wide range of coverage options.

2)      IDV

IDV stands for Insured Declared Value, it is the approximate current market value of your car. IDV is not to be confused with the resale value. Resale value of a car would be more than its IDV. When you renew car insurance you need to set the IDV of your car. Your insurer will lay out a range in which you can consider setting the final IDV. It is important to note that setting a higher IDV will result in an increased premium (as IDV is directly proportional to the cost of a car insurance policy). On the other hand, setting a lower amount will result in a lower claim amount in case of a total loss arising from extreme damage or theft. Each year the IDV of your car will decrease.

3)      NCB

NCB stands for No Claim Bonus. This is a direct discount you can avail when you do not make any claims. NCB is not available when you buy a new car insurance policy. This discount can be as high as 50% if no claims are raised for 5 consecutive policy years. Thus, it is considered to be the highest discount one can get on car insurance. If you have not raised any claims in the previous policy period, make it a point to check the accumulated NCB at the time of car insurance renewal.

4)      Add-ons

As time goes by, your requirements and situations can change. If you were a bachelor at the time of previous car insurance renewal and are married now, you might consider buying additional coverages. This is why you should check out the available options when renewing the policy. Another example would be if you move into a flood-prone are you might want to consider buying an Engine Protection cover to your comprehensive car insurance policy. Thus, gauge your requirements each time you wish to renew the policy.

5)      Other Discounts

Other than the NCB, you can check if you are eligible for any additional discounts on car insurance. Common ways of getting a discount are becoming a member of any of the Automobile Associations of India or installing an anti-theft device in your car. These can fetch a decent discount if you let your insurance company know. Another way is to keep an eye on the discounts declared by your car insurance company.

6)      Insurance company

It is not necessary to stick with one car insurance company if you are not happy with their services. You can switch your insurer without losing on the discounts you have availed in the past. An ideal insurance company should be customer-friendly, offer prompt services and assistance, and affordable car insurance products. Nowadays, you can easily find these qualities in online insurance companies. They try to make it a point to serve their customers in a better way.

The Bottom Line

Things like NCB and other discounts may not be available when you buy a new car insurance policy. However, remember to avail these discount while renewing the policy. More importantly, consider updating the coverage of your policy at each renewal.


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