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With everything available online easily and smoothly today, every industry is taking the benefits of digitalization and new age technologies including the field of insurance. Today, choosing a good policy, purchasing a policy, comparing benefits as well as renewing an insurance policy, everything has become convenient online.
Be it health or vehicle insurance- the overall process to purchase or renew insurance has become a lot quicker, smoother and simpler without any excessive forms or documents submission. However, there are certain areas where you need to be careful and secure your experience of insurance. Especially when it comes to car insurance, there are some common mistakes that you can avoid. Let’s take a look at them.
Mistakes to avoid when buying or renewing car insurance
1) Avoiding research – While shopping for an insurance policy it is important to do a basic research on what plans are latest and best along with what match your insurance requirement. Also checking for which insurer is trust worthy by evaluating reviews and client experiences.
You can also check at the Insurance Regulatory and Development Authority of India (IRDAI) site on any insurer and its operations. Remember to verify the insurer’s authenticity, brand ethos, andcustomer analyses.
The mistake to avoid here is do not buy your car insurance in a haste. Always do a basic research before purchasing or renewing your insurance plan.
2) Policy comparison –As you think of buying a car insurance plan keep in mind to first compare the insurance policies available that suit your need. Do not just jump to the first policy you see or are recommended for. When it comes to buying car insurance policies, not comparing policy quotes, exclusions and inclusions can lead to insufficient insurance coverage.
Hence it is good to always spend some time comparing the insurance policies based on your need, their availability and the one most suited for you. You should remember to check all the relevant aspects like your budget, the coverage provided and claim settlement procedure. Comparing plans willguarantee that you get the ideal car insurance coverage at an affordable rate.
3) Opting for less coverage – When you decide to book an insurance for your car, you do not just take into account the financial, the protection or the cost aspect you will also have to consider the coverage provided. Opting for a plan that is cheaper but provides very less coverage is a mistake and does not fulfil your insurance needs. Like, such low coverage plans may help you in case you damage someone else’s car but not offer any assistance in case your own car is damaged in an accident. For that, you need a plan, which provides more coverage but may be slightly higher in cost as compared to less coverage offering plans.
4) Resorting to old practices – Today, everything is easily available online including buying and renewing insurance plans without any hassle or paperwork. However, if you are still stuck on old practices of going offline everywhere, submitting endless documents and repeatedly visiting the insurer’s office for updates, you are doing the mistake of being rigid towards the changing digital time. At times you have to change along with the changing times and that too for your own good.
5) Not choosing and Anti-theft devices – Car theft is a tragedy! While buying a car insurance policy you should avoid the mistake of buying an anti-theft device for safety of your car. As in case of any car theft, you can take the benefit, avoid financial burden, even enjoy the discount for installing such devices. A good anti-theft device guarantees the complete security that you are looking for. Avoid the mistake of missing on this advantage.
6) Add-ons – Don’t forget to purchase add-ons while buying an insurance policy. Avoid the mistake of missing out on better claim pay-out, convenience quotient and additional benefits like extended coverage of buying add-ons with your car insurance policy. Always analyse your insurance requirements and then make the decision. For instance, if you use your car regularly then a Roadside Assistance Add-on is crucial. A Zero Depreciation Add-on, which refutes depreciation calculation during claims settling, is beneficial for cars that are new.
7) IDV - The Insured Declared Value (IDV) of a car is a criticalaspect while purchasing car insurance. IDV is the present value of the car, neither the invoice or resale value. It is the amount that is calculate after considering the depreciation cost of the car as well. Choosing an incorrect IDV can be a mistake which you need to avoid. Remember, while purchasing car insurance you need to balance the IDV, a higher IDV means a higher sum insured and a higher premium while a lower IDV means lower sum insured and lower premium. Preferably, you should be able to achieve an IDV somewhere in the middle to create a balance.
8) No Claim Bonus–Don’t make the mistake of not taking advantage of the No Claim Bonus (NCB) component of aninsurance policy. It can help lower your premium and get renewal discount for remaining claim-free before policy renewal.
9) Sharing data – While buying an insurance policy, it is a mistake to be inaccurate in sharing your data or information. You need to be transparent in all your details shared with the insurer. Insurance is based on trust. So, always share truthful information and likewise make sure you check the policy documents in-depth to avoid any mistakes from the insurer as well.
If you hide any information or provide incorrect data then you are against the law and can be arrested or penalised for being a part of illegal activities.
10) Policy expiration – Avoid the mistake of not renewing your policy before it gets expired. Insurers inform policyholders about upcoming expiry date in advance. When you receive such notifications, it is wise to act on them instantly and renew your policy at the earliest.
By not renewing on time your insurance cover will cease to protect the moment it lapses. In case you are caught by any official authorities with an expired car insurance policy, you shall face monetary penalty or even legal complications including jail.
So, while purchasing or renewing any policy, make sure to verify all the details you submit and ensure none of it is wrong. Verify all your details such as name, address, vehicle number, cover, and expiry date as in case of any mistake, your settlement might get affected at the time of claim.
Also, make sure you read all the policy wordings carefully. Avoid the mistake of missing or overlooking any point. If you find any of the content to be confusing, you can get in touch with the insurer and ask your doubts. Do not leave any queries unanswered. Keep in mind, it is important to make an informed decision when it comes to buying or renewing an insurance policy.
In summary, it is crucial to go through all the points and avoid these common mistakes while buying or renewing your car insurance policy. Think wise and stay insured with a relevant and optimum coverage you wish for.
FAQs – Frequently asked questions.
Q1: Is having a gap between policy expiry and renewal also a big mistake?
Yes, when it comes to car insurance policies, it is essential to renew your policy immediately after it expires as it may affect aspects like vehicle inspection, insurance premium on renewal and the accumulated NCB as all these benefits along with the coverage get affected after a policy gets expired.
Q2: In case I am purchasing a new plan, should I cancel my existing car insurance policy first?
No, it is actually the other way around. Your previous insurer will ask for a new policy to cancel the existing policy, unless you decide to sell your car. So, remember to cancel existing policy instantly after you start new policy else you will be exposed to risks without any cover and will be open to legal complications as per The Motor Vehicles Act.
Q3: Is there any specific limit to the number of add-ons I can pick in an insurance plan?
No, there is no limit to the number of add-ons you can have for an insurance plan. However, you must be selective in choosing add-ons that boost your cover as per your insurance requirement.
Q4: If I made a mistake in the car insurance buying process by not giving the claim history accurately, can I rectify my mistake?
Yes, you can rectify your mistake by contacting your insurer and updating the details.
Q5: If I purchase Third-party liability plan for my car, can I switch to a digital insurer and buy a Comprehensive plan?
Yes, you can switch insurers as well as policy coverage. The best time to do so is when you renew your policy.