A Comprehensive Guide to Renew Your Car Policy Online

Imagine it is 11:50 PM and your car insurance expires at midnight. You are panicking and scrolling just to click and buy the first policy you see, and end up paying whatever amount pops up on the screen. If you relate to this or have sufficient time before your policy lapses, we have carefully curated this guide to assist you with your car insurance renewal process.Read more

The Roadmap to Renew Your Policy

Car insurance renewal is not only about avoiding a ₹2,000 traffic challan and having coverage because the Indian Motor Laws say so. It is also about protecting your No Claim Bonus (NCB), if you are within the grace period (30 to 90 days, based on your insurer) and ensuring that an accident bill does not come out of your own pocket, leaving your budget completely disrupted. Continue reading to know how you can easily do the following things online:

• Renew your car insurance online the smart way
• Switch insurers without any hassle
• Save money without compromising on coverage

Why is Timely Renewal Important?

It is important to timely renew your policy for the following reasons:

• Legal Requirement: According to the Motor Vehicles Act, 1988, it is mandatory for all vehicle owners to have at least a third-party insurance policy to drive on Indian roads. Driving with an expired policy can result in heavy fines.
• Continuous Financial Protection: An active car insurance policy is important as it is a financial safety net. It covers several types of expenses, including damages and third-party liabilities in the event of an accident. If your policy lapses, even for a day, you are personally responsible for all the expenses, and the insurer is not liable to settle your claim.
• Preserves No Claim Bonus (NCB): The NCB is a discount on your premium offered for each claim-free year, which can be as high as 50% after five consecutive claim-free years. You will lose your accumulated NCB if your policy lapses.
• Better Premiums: If you renew your insurance after expiry, chances are your premium will be high due to a higher risk for the car insurance company.
• Vehicle Inspection Delays: If your policy lapses, the insurer may conduct a mandatory vehicle inspection before issuing a new car insurance policy. This process is time-consuming and can further delay your coverage. Insurers also levy inspection charges before issuing a fresh policy.

What to Check Before Renewing Car Insurance?

Before you finally hit the payment button, here are a few things you must keep in mind that affect your premium:

• No Claim Bonus (NCB): If you have not raised a claim in your previous policy period(s), you are entitled to get a discount of up to 50% on your own-damage premiums. It helps you save money and significantly reduces your premium. You can accumulate NCB discounts after consecutive claim-free years. You can easily check your accumulated NCB on your existing policy documents.
• Insured Declared Value (IDV): The age of your vehicle determines the depreciation slab and helps to calculate the IDV of the insured car. This directly impacts the premium as a higher IDV results in a higher premium, while a lower one can reduce your claim amount and premium.
• Add-Ons: You can choose multiple add-ons at a minimal additional cost. However, it is important to carefully consider and choose the add-ons that are relevant to your car. For example, you might not need a tyre protection cover if you drive very less and that too on well-maintained roads and highways.

Alternatively, you can also use a car insurance premium calculator online to get an estimate of the own-damage premium of your insurance policy.

Timeline to Renew Car Insurance

Not letting your policy expire and being on time can help you save money, effort, and unnecessary stress. Let us look at the best time to renew your policy and keep your coverage intact:

1. 30 Days Before Expiry (The Comparison Phase)

   This is the ideal time to start comparing various plans as car insurance companies allow you to renew your policy up to 30 - 60 days before expiry, depending on the insurer. Some insurers allow you to check and compare premium costs even 45 or 60 days in advance, leaving you ample time to make an informed choice. You can compare quotes from different insurers, review add-ons, and choose the right IDV to calculate your premium. This helps you get maximum coverage within your budget instead of rushing and choosing the wrong policy at the last moment.

2. 7 Days Before Expiry (The Final Decision Phase)

   After comparing various plans, understanding your coverage, evaluating the add-ons you need, and completing your research, you should now shortlist your insurer. It is ideal to finalise your policy a week in advance, as the coverage only begins once your current plan expires. This ensures uninterrupted coverage and helps you avoid last-minute issues like payment failures or inspection delays.

3. Same Day Expiry (The Panic Moment)

   To save you from the panic of last day, it is always better to act fast. However, if you are crushed with the deadline and your policy expires today, you must finalise your plan before the clock strikes midnight. Same day renewals are often tedious as they leave you no room to compare plans, there may be technical glitches and failures to verify your eKYC or issue a new policy. Despite the risks, it is still important to go ahead, as it helps to save you from vehicle inspections and policy rejections.

4. After the Expiry Date (The Oops Moment)

   If you miss the due date, your policy enters the grace period. Within the grace period, the insurer will conduct a vehicle inspection before issuing your new policy. However, if you also miss this deadline, you may not be eligible for the discount accumulated with your no claim bonus, which will cause an increase in the premium. To avoid these complications, it is always better to be on time.

What to do in the Case of Special Scenarios?

Here are 2 special scenarios many car owners face:

1. Case 1: If you have a "Used Car"

   For example, you bought a second-hand car from someone, which had an active insurance policy in the name of the previous owner. In such a case, you will not be able to renew or file a claim against the same policy. It must be transferred to the new owner using the following steps:

   • Fill out form 29 & 30, to transfer the car in your name.
   • Submit the same request to the insurer to change the car insurance ownership
   • Submit all the required documents, such as RC copy, old policy, sale agreement, etc.
   • The insurer may conduct an inspection if required
   • Once the inspection is successful, the policy will be endorsed to your name

2. Case 2: If you have an "Expired Policy"

   Let's suppose you have forgotten to renew your policy within the deadline. When you renew your policy after it has lapsed, the insurer requires an inspection. Thanks to digitalisation, several insurers offer a quick self-inspection using the following steps:

   • Go to an aggregator or insurer website.
   • Enter all the required details.
   • Your insurer will give you an option to upload a self-inspection video.
   • Capture clear photos and videos of the car (front, rear, sides, engine bay, chassis number, and odometer).
   • Submit the inspection request.
   • Wait for approval from the insurer.
   • Pay the premium once approved.
   • Your policy will be issued after successful verification.

Common Ways to Ensure a Smart Renewal

Before you finally hit that payment button, you must ensure the following steps for a smart renewal:

1. Finding the Correct IDV

   The IDV is the maximum payout an insurer will pay in case your car is stolen or damaged more than 75% of its insured value. The IDV directly impacts your premium. Policyholders often get confused and set a lower or higher IDV, which changes their premium. Here is how you can avoid the trap:

   • Problem Statement: Setting a low IDV to reduce premium or a high IDV to increase the claim amount.
   • Risk Factor: Setting an incorrect IDV either leads to a low claim payout or an unnecessarily high premium.
   • Solution: It is ideal to select an IDV value which is within the insurer's allowed range based on car age and market value. It is the depreciated market value of your vehicle.

   Here is the IRDAI-approved depreciation slab:

   Car Age	Depreciation Percentage
   Up to 6 months	5%
   6 months - 1 year	15%
   1 year - 2 years	20%
   2years - 3 years	30%
   3 years - 4 years	40%
   4 years - 5 years	50%

   *For cars older than 5 years, the IDV is decided mutually between you and the insurance company.

2. Selecting the Relevant Add-Ons

   As your car ages, you may or may not need certain car insurance add-ons. Check the list below to understand whether you need them:

   • Zero Depreciation: Zero depreciation insurance is beneficial for cars under 5 to 7 years old. It ensures that your provider does not deduct depreciation while settling an accidental claim.
   • Return to Invoice (RTI) Cover: If you have a fairly new car (up to 3 years old), it is always better to have an RTI cover. With this add-on, the insurer will reimburse the vehicle's invoice amount, instead of the IDV, in case of total loss.
   • Consumables Cover: While many policyholders often overlook this underrated add-on. However, it is important as it covers the cost of oil, nuts, and bolts during repairs, which are quite expensive to bear.

   For example, if your car insurance policy costs ₹11,500 without any add-ons, in case of a road accident and a damaged bumper, you will have to bear all the costs of repair. These repair costs may reach ₹7,000 for a Tata Nexon front bumper. However, with a zero depreciation cover that costs approximately ₹3,000, making your total premium around ₹14,500, but saving you ₹7,000 while you settle a claim.

3. Cashless Garages

   It is always beneficial to check if the insurer offers several network garages in your city with your policy. It helps to file cashless claims and reduce any upfront expenses for you.

Can You Switch Car Insurance Provider?

Yes, you can easily switch your car insurance provider. Here are some things to remember while switching your insurer:

• There is no charge or penalty to change your provider.
• You must disclose your current NCB while renewing your policy.
• Your previous insurer will issue an NCB certificate if there is no break in your policy, which will be applied to your new policy automatically.

Step-Wise Renewal Process

Use the steps mentioned below for a hassle-free process:

• Gather all Documents: You will need your previous policy copy and vehicle registration certificate (RC) handy to fill in all the required details.
• Compare Different Insurers: Select the IDV, NCB, and choose the required add-ons, to compare all the different providers. Check the premium, coverage, claim settlement ratios, and more to choose the most suitable policy.
• Payment and Policy Issuance: Pay the premium using your preferred mode of payment. Your policy will be instantly renewed and mailed to the registered email address after successful payment. Policyholders must note that digital copies stored on their phone or the Digilocker app are legally valid.

Documents Required

You need to submit the following documents:

• Previous year policy copy
• Valid government ID proof, like Aadhar Card, PAN Card (for eKYC verification)
• Copy of driving license
• Car registration certificate
• PUCC
• Recent photograph (in case of offline)
• Address Proof (eg- Aadhar Card)

Tips to Save Money During Renewal

Policyholders can use some of the following tips to save money and reduce their premiums:

• Drive Safely and Responsibly: Have a good driving record along with a claim-free policy year to earn an NCB discount. You can get up to a 50% discount on your premium after 5 consecutive claim-free years.
• Necessary Add-Ons: Select the most relevant add-ons to avoid an unnecessary increase in premium. For example, if you have an old car and do not drive frequently, you might not need a zero depreciation insurance.
• ARAI-Approved Anti-Theft Devices: Install anti-theft devices approved by ARAI to get a discount on your premium.
• Voluntary Deductible: Opt for voluntary deductibles if you can bear the out-of-pocket expenses while filing a claim to reduce your premium.

Common Mistakes to Avoid During Renewal

Some of the common mistakes you must avoid are given below:

• You must not wait for your policy to expire and renew it timely. Last-minute renewal not only causes unnecessary hassles but also increases your premium. You might end up paying more for even less coverage.
• It is always beneficial to compare different quotes from multiple insurers to choose the best coverage and the best price.
• Set the appropriate IDV to calculate your exact premium.