A policy that effectively takes care of the expenses arising from unfortunate events, getting a car insurance is the best way one can protect self as well as the car from financial emergencies.
Is Car Insurance Renewal Important?
Mandatory by the law (as per the Motor Vehicles Act 1988, and the Insurance Regulatory Development Authority), it is essential for every car owner to get an insurance for their vehicle. The sole purpose is to protect the car from any financial emergencies arising due to accidents/damage/theft. A symbiotic relationship is the one where both the parties benefit from each other. In terms of cars, car insurance and its renewal form a symbiotic pair. Thus, upon the annual expiry, it is requisite to renew the insurance for another term keeping in mind not only the security of the cars and their owners; but doing so could also fetch the policyholder additional benefits.
A hundred-year-old practice, originating in the United Kingdom, the first third-party cover was implemented on a motor insurance in 1895, followed by a complete comprehensive policy in 1899. The Road Traffic Acts (1930 and 1934) were introduced post the rise in motor vehicles on road and subsequent increase in the number of accidents. Due to unrecoverable damages and the injured receiving no compensation, the Road Traffic Acts was formulated which covered the threats arising from vehicles running on the road without active third party insurance.
In India, the Motor Vehicles Act was passed in 1939, stating the need for third party insurance. The guidelines followed were mostly the same as that followed in the United Kingdom. This Act was later replaced by the Motor Vehicles Act (1988). With the first insurance implementation, the premium lasted not more than a year and this formed the basis of implementing and adopting the car insurance renewal policy online. The key points that led to this implementation were:
- With the passage of time, owners of the new car often would forget to buy a new car insurance cover for the next year. Accidents occurring during such a period did not provide financial compensation to the injured third party.
- Vehicle owners did not find the need to get the car insurance if they drove their car carefully. However, the claims made due to theft and natural/man-made damages provided a buyable option.
- With the implementation and regulation of the Motor Vehicles Act, an all-time active insurance cover became not only necessary but mandatory by law, catering to the safety of the car, owner and third party involvement.
Hence, by making the policy renewable, car insurance renewal was implemented to ensure that any damage to vehicle, property or person can be compensated financially without any hassle.
Points To Know About Car Insurance Renewal
There are certain things that must be kept in mind while purchasing a car insurance renewal policy.
- The purchase of more than one policy from the same insurance company makes the policyholder eligible for a discount on the insurance cost.
- A co-passenger cover can be added to the car insurance cover thus saving on the insurance cost for another policy.
- No claim bonuses can be availed if claims haven’t been made the previous year of the policy. The bonuses are usually discounts on the insurance premiums upon renewal.
- The claim settlement ratio can help in changing the insurance provider in cases where the ratio is low or the after-sales service doesn’t satisfy the requirements.
- By evaluating the Insured Declared Value (IDV) of your car, you can check the appropriate coverage amount for the car as well as yourself.
- Many insurance companies, through their online portals, offer a wide range of discounts on premiums and other added benefits such as cashless garage facilities and roadside assistance.
- Certain renewal policies have the option of installing safety equipment devices in your car and this helps in lowering the insurance premium amount.
- A variety of car insurance renewal policies are available that provided added benefits such as zero depreciation cover and medical expense covers.
- The renewal date of the insurance policy is based on the date the policy is activated. Usually renewing annually or semi-annually, the other factor that could determine the renewal date is the length of the policy period.
- Some auto-renewal policies are locked in for a full year but the most common auto-renewal policies renew every six months.
- Renewal information reminder is usually emailed or sent by courier 30-45 days prior the renewal date.
- Inflation affects the rise in renewal costs and hence it’s advisable to renew the policy before the due date. Not only does this saves money when it comes to inflation, but also provides additional offers by the insurance company.
Car insurance renewal is like a safety net that protects you, your family and your car. It is imperative that your cherished vehicle is equipped with adequate protection from any unforeseen events.