When Should You Renew Your Car Insurance Policy?
A car insurance policy protects a car owner from several financial losses arising due to any mishaps involving his/her car.
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Best Time to Renew a Car Insurance Policy
Every car insurance policy comes with a policy period that includes the date of commencement and the expiry date. Most car insurance companies offer an annual plan or long-term plans for three or five years.
As per the Insurance Regulatory and Development Authority of India (IRDAI), an insurance company must offer motor vehicle insurance to its customers for up to three years. It is one of the best options to free yourself from the hassle of annual policy renewal. You can easily renew your car plan after three or five years whenever your policy expires.
But if you own an annual or short term car insurance policy, the best time to renew your policy is 15 to 30 days before the expiry date. For example- if your car insurance policy expires on 23 April 2022, then it would be ideal to renew it on 24 March, or after that. However, if you forget to renew the policy on time, you must check the grace period offered by your insurer to renew your four-wheeler insurance policy. Usually, the grace period is 30 to 90 days. But it may vary from insurer to insurer and so, you must check your policy documents carefully.
Moreover, any claims raised during the grace period will not be accepted because your two-wheeler insurance policy becomes null and void at this time. Also, some insurers might charge you late fees for renewing your policy during this grace period.
Why Should You Renew Car Insurance Policy on Time?
Below are a few reasons why it is important to renew your car insurance policy on time-
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You are Free from Legal Liabilities
In India, as a car owner, you must have at least a third-party car insurance policy. A valid car insurance policy protects you from unwanted financial losses and legal issues. In case you have an invalid or expired policy, you will have to pay hefty fines if get caught by the traffic police as per the motor laws of the country.
Under Section 196 of the Motor Vehicle Act 2019, you will have to pay Rs 2000 for driving without a valid car policy for the first time, and on the subsequent offence, you will have to pay Rs 4000 and imprisonment of up to 3 months is also possible. Driving a car without a valid car insurance policy can also lead to suspension of your driving licence.
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You Can Save Money
A timely car insurance renewal means saving a lot of money. In case you forget to renew your insurance policy on time, then you will have to buy a new four-wheeler insurance policy. Doing so will cost you more than the policy renewal amount.
In the worst scenario, if you meet with an accident, and do not own any car insurance policy, then you will have to pay for all the damages from your own pocket. Therefore, the best time to renew a car insurance policy is before the date of expiry.
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You Will Not Lose Accumulated No Claim Bonus
With timely car insurance renewal, you will be able to avail the accumulated bonus known as the No Claim Bonus (NCB). It is a discount offered by an insurer to the policyholder for not raising any claims during the policy's tenure. Therefore, you will be able to reduce your renewal premium by 20% to 50% depending on the number of claim-free years.
5 Tips to Save Money on Car Insurance Renewal
Now you know how important it is to renew your car insurance policy on time. So, here are a few tips on how to make your next purchase or renewal successful-
- Renewal from the Existing Insurer- You might get a loyalty discount or any complimentary benefits if you renew a car insurance policy from your existing insurer. So, before switching your insurer, you must ask for car insurance quotes from your existing insurer.
- Browse Other Options Too- Although it is suggested to buy an insurance policy from your existing insurer for receiving loyalty discounts on premiums, check for other options as well because you may find another great deal from a new insurer.You can do so by comparing multiple car insurance plans online on Policybazaar.com
- Purchase Online- Instead of buying the policy offline, you must browse for options available on the internet.It is the most convenient and hassle-free mode.
- Install an Anti-theft Device- Insurers usually offer a discount on the premium if you have installed it in your vehicle because it eliminates the risk of theft.Hence, you must install approved anti-theft devices in your car.
- Review Your Policy- Before finalising the plan, you must review your policy documents. Also, never settle for less, and always ask for added services or benefits from the insurer.
Summarising
It is always a good idea to renew your car insurance policy on time for a hassle-free renewal and to earn multiple benefits. Also, it is the best time to review the coverage and customize the policy as per your preferences. You can compare vehicle insurance plans from different insurers online to pick the best plan. Moreover, you can buy add-on covers to enhance the basic coverage by paying a little extra premium.
