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The Indian motor insurance business has an 87% retention ratio at the end of the financial year 2021. In recent years, the ratio has remained constant at approximately 86 to 88%. The industry retention ratio is a crucial indicator for determining how many consumers continue their insurance coverage after the first term has been completed.
As you know buying car insurance is mandatory in India, at least third-party insurance is required. It’s quite tricky to choose the right car insurance and you have to keep certain things in mind to get the right policy as per your requirements. Also, this doesn’t stop here as each year you have to renew your policy and have to go through the process all over again. However, if you keep a few things in mind, renewing your policy is not that demanding. To make it easier for you, here we are sharing our car insurance renewal checklist you must consider before renewing your car policy:
Update your Plan
At the time of renewal, you have a choice to update your plan, you can purchase a third-party liability or a comprehensive plan. Third-party insurance is less expensive but it only covers the basics. A comprehensive plan, on the other hand, provides you with more coverage, including your car damage coverage but at a little higher cost. So first, you must identify which policy best suits your needs.
Include necessary Add-Ons
While renewing your policy you can add riders or additional benefits to enhance your policy. These add-ons are not mandatory but can serve you better if you include them in your policy. Some basic add-ons are available with your standard policy like zero depreciation and engine protection cover, these two are generally recommended and a must-have.
Check your Car’s IDV
If your car is stolen or damaged, insurance providers will reimburse you up to the current market value of your vehicle, which is referred to as insured declared value (IDV) in insurance terms. Before renewing your policy, you should check your car’s IDV as it helps you to negotiate better with your insurance provider and pay the right amount of premium.
Check list of Network Garages
It is quite difficult and inconvenient to wait for payment from insurance companies. Therefore, you should consult your insurance company for a list of cashless network garages. Their website usually has all the information about the list of network garages. If required, you can also enquire about the insurance providers with whom your preferred/regular garages are affiliated to ensure hassle-free cashless claims.
Choose Higher Deductibles
Deductibles are the parts of claims that you, as the policyholder, are responsible for. These are divided into two categories: mandatory and optional. Mandatory deductibles are the inevitable reductions made by the insurance on each claim. On the other hand, in optional deductibles, a part of the claim is payable from your pockets. Your premium will be decreased if you agree to pay some amount out of your pocket. If you have an excellent driving record, it makes sense to choose higher deductibles.
Check your No Claim Bonus
No claim bonus is a reward given by insurance companies to their customers if they do not claim for their coverage during the policy year. The claim bonus starts at 20% for the first year and increases to 50% by the fifth year. NCB discount is offered to the policyholder at the time of the policy renewal for responsible ownership. NCB is for the owner, not their vehicle, make sure you check your NCB before renewing your car policy even if you are porting plans.
Check Insurer’s Claims History
If you are planning to change your insurance plan, an insurer's claims history might allow you to decide whether or not to purchase a policy from a specific insurer. You should opt for a process that is simple and quick. Research online or ask friends and family to ensure that the process is smooth and safe. Also, check if there’s any difficulty in working with the insurer on claims or other concerns.
The above suggestions will make your renewal procedure go smoothly. Last but not least, actively renew your policy on time otherwise any car-related issues or mishaps can hurt your finances. So, spend some of your valuable time researching and comparing different insurance policies, it will undoubtedly save you money. Happy shopping!