Car Insurance has become an obligatory legal requirement at the time of purchase of your car. Consequently, many insurance companies have different types of policies to offer and the customers often get confused as to which policy to opt for. This problem not only occurs for buying a new insurance policy, but it is also faced at the time of policy renewal. Most of the policyholders are doubtful whether to stick to same policy or opt for a new one. For this customers, as a policyholder, have to consider many factors before renewing their insurance policy. This will help them to make right choices and also end up in saving a lot of money.
Guidelines on Car Insurance Renewal
As everybody is aware that car insurance has become a mandatory requirement, there have been few cases where customers, as an insured, are charged high premium. But, there are several ways by which policyholders can pay lower premium amount and get maximum benefits in case of any accidents.
- Evaluate different policies: – Many policyholders think that they have the best policy and so they renew it without revaluating various policies offered by insurance companies. This is the major reason they pay high premium amount. Policyholders, at the time of car insurance renewal, must compare various policies online and opt for those policies where they can reap maximum benefits at a low premium amount.
- Review various offers provided by insurance companies: – Prior to car insurance renewal, policyholders must review the features of the policy. They should find out what they need and what they don’t need. For example, if there is a special clause for which policyholders are being charged extra, look into whether it is beneficial or not.
- Advance Renewal of policy: – Furthermore, policyholders should not wait for their existing policy to get expired. It is always advisable to renew it at least 45 days in advance. Thus, if the price rises in that period, your price is locked in and you are not required to pay the extra amount.
- No claims bonus: – No claims bonus is a sort of bonus that is paid to the policyholder if he had been having claim free years. So check and see if this benefit is available in the policy. If yes, then the discount will be deducted from your premium. The discount can go up to 50% and it is up to the policyholder to decide whether he wants to transfer the same on some other vehicle.
- Cross examine the details: – As a lot of incorrect data is hovering everywhere, thus never forget to cross examine all the information you find. If car insurance renewal is being done online, then compare the policies on more than one website and also check on the website of the insurance company. If it is being done offline, hire a good and reliable agent for the job.
- Calculate Your Vehicle’s Value: – It is really important to calculate your car’s market value before renewing your insurance policy. Once the depreciated value of the car is known, policyholder can negotiate with their insurance agent over the premium amount, and save quite a lot.
For example, if the market value of your car at the time of purchase was Rs.4 lakh and after three years, its value is Rs.2 lakh, i.e., the car’s value has depreciated by 50%.
Therefore, during car insurance renewal, policy should be taken on the depreciated value of Rs.2 lakh instead of the original market value Rs.4 lakh.
- Claim Voluntary Deductibles: – As suggested by experts, policyholders should claim higher deductibles, in order to reduce the premium that is paid later. Voluntary Deductible is the amount that is paid at the time of the claim. It is a discount offered which can go up to 35% of premium for the damaged vehicle.
Hence, if policyholders follow these simple guidelines, they can end up saving a lot of money at the time of car insurance renewal. Renewal of car insurance policy is a quick and easy process but a small amount of time is required to spend in finding out the available options which could be profitable to you.