Is It Beneficial to Stay With the Same Car Insurance Company?

Life is a playground for uncertain things. Anything good or bad can happen any time leaving you overjoyed or shocked. This is why everyone needs to keep themselves and their loved ones safe from all kinds of dangers. Not just yourself, you must also try your best to keep precious things, such as your car, safe. You may have spent a lot of money to buy your favourite car and even slight damage can lead to monetary loss.

When it comes to your car, the best way to protect yourself from any financial losses arising out of your car is with the help of a car insurance policy. Car insurance is a contract between the car owner and a motor insurance company under which the insurer promises to provide financial security to the insured’s car in case of any loss or damages. It covers your car against any loss or damages arising out of unforeseen events, such as fire, accidents, natural calamities, theft and manmade disasters. It also safeguards you against any third party liabilities resulting out of your car. Moreover, as the owner-driver of the car, you also get personal accident cover from your motor insurer.

Which Type of Car Insurance Plan Should You Buy?

As per the Motor Vehicles Act, 1988, you must have a car insurance policy for your vehicle. The motor insurance industry offers two types of car insurance plans in India on the basis of the coverage offered. The first one is comprehensive car insurance and the other one is third party car insurance. Let’s understand both the types of car insurance plans in detail.

Comprehensive insurance is a type of car insurance policy that provides complete financial coverage to your car. It covers you against any third party liabilities arising because of causing damages or bodily injuries to third parties with your car. It also provides financial aid in case your car has been stolen or damaged in a fire, natural disaster, accident or manmade disaster. It will also provide you with compensation in case you get disabled or die during an accident of your car. Thus, comprehensive car insurance covers your third party liabilities as well as the own damages of your car.

Third party car insurance is the second type of car insurance plan that you can buy for your car. As the name suggests, third party car insurance only provides financial coverage against third party liabilities of the insured. These legal liabilities can arise in case you injure someone or an unknown person’s property from your car. Under this type of policy, the motor insurance company pays compensation to the affected third party for their losses on your behalf.

The motor laws of our country mandate all car owners to have at least a third party car insurance cover. So to fulfil the law, you only need a third party car insurance policy for your vehicle. However, it is always advisable to buy a comprehensive insurance policy for total security of your car, except in the case of old cars.

Whether you prefer comprehensive car insurance or third party car insurance, you can easily purchase it online. All motor insurance companies offer car insurance online on their official websites. You also have the option of buying car insurance online through insurance brokers, such as policybazaar.com. They also allow you to compare various car insurance plans online based on their premium, benefits, coverage, etc.

Car Insurance Renewal

Most car insurance policy comes with a validity of one year. When it comes to brand new cars, car insurance is available for a period of three years. However, you need to renew your car insurance policy every year before it gets expired. Car insurance renewal ensures that there is no break in your policy and your car stays financially protected at all times. It also prevents you from breaking the motor laws and attracting a fine from the police. Just like you buy car insurance online, you can also renew your car insurance policy online from the comfort of your home.

At the time of policy renewal, you can either continue with the same car insurance plan or change either your plan or your insurer. People often wonder if sticking with your existing car insurance plan is a good idea in the long run. The following disadvantages of renewing car insurance from your existing motor insurance provider can help you in arriving at a decision.

Disadvantages of Renewing Car Insurance from the Same Insurer:

  • Low Chances of Premium Reduction

    A lot of people renew the same car insurance plan because they hope for their premium to remain the same every year or increase only a little. Besides, they also save themselves from going through the entire process of buying car insurance online every year, including filling up the proposal form. However, by sticking with the same plan year after year, you miss the opportunity to explore other plans that may be available for a lower premium price. This can happen because the motor insurance industry is constantly evolving and insurers come up with new and better car insurance plans. Some of these new plans may offer greater benefits at a lower premium but you will not come to know of it unless you explore the market or compare car insurance online. Thus, you must compare car insurance plans from different insurance providers at the time of renewing insurance for your car.

  • Lower IDV Can Be Offered on Renewals

    The premium of your comprehensive or third party car insurance policy depends on several factors, including the IDV or the Insured Declared Value. IDV is the maximum claim amount that an insurance company pays to the policyholder in the event of a loss. There can be a possibility that your motor insurer has reduced your IDV on policy renewal to offer you a lower car insurance premium. The reduced IDV means lower claim amount that can result in financial losses in case your car gets severely damaged or destroyed. By comparing car insurance plans during renewal, you can check how much IDV is offered by car insurance plans by other insurers and if your existing insurer is offering a reduced IDV to keep your premiums low. This can help you make an informed decision by renewing with a plan that offers adequate IDV at an affordable premium.

  • Losing Out on New & Better Add-On Covers

    As motor insurers keep innovating, they introduce new and better add-on covers under car insurance with time. The only way to include these new add-on covers in your car insurance policy is by updating them at the time of renewal. But if you decide to stick with the same car insurance plan, you will be unable to benefit with the new add-on covers. Thus, you must scout the motor insurance market during renewal and compare various car insurance plans online to buy the most suitable policy for your car.

  • Missing Out on Better Deals

    Some people consider the process of changing car insurance online more of a hassle. They do not want to get their car inspected or fill up a proposal form every year and thus, stick with their existing car insurance plan. Besides, they also expect loyalty discounts from their insurer for buying insurance from them year after year. This is precisely the reason why insurance companies find it easier to retain customers than finding new ones. In a bid to attract new customers, insurance companies often provide better deals to new customers than the existing ones. You may end up getting a better car insurance deal upon changing your insurer than the loyalty discount from your existing insurer. Hence, you must do thorough market research before renewing car insurance online.

Is Sticking With the Same Car Insurance Worth It?

Renewing car insurance online with the same insurance plan is no doubt more convenient and hassle-free. You may also get the lowest car insurance premium from your existing insurer during renewal. However, it is important to check if your motor insurance provider is offering you the best deal in the market. Buying the lowest priced car insurance online with lesser IDV and fewer add- on covers is not a wise decision. Besides, you may miss out on some new and innovative plans if you do not update your car insurance during renewals. Moreover, switching insurers has zero impact on your accumulated No Claim Bonus (NCB) as you can easily get it transferred to your new policy.

Sticking with the same car insurance plan is worth only if they offer the best deal to you. The best way to find out if you should stick with your same car insurance is by comparing different car insurance plans online. You will be able to find out what does your existing car insurance lack and which insurance company is offering the best deal.

In a Nutshell 

Car insurance is a great way to offer financial security to your car and prevent the possibility of a financial loss. You must remember to renew your comprehensive or third party car insurance online before it gets expired. Just make sure that you compare various plans by different insurers online to get the best car insurance deal.

Written By: PolicyBazaar - Updated: 19 March 2021
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