ayush gupta
Renewing your car insurance is essential, but many drivers are surprised when they see their renew car insurance price increase. A rise in premiums can happen for several reasons, including claims filed in the previous year, changes in government regulations, or a reduction in the No-Claim Bonus (NCB).
Whatever the cause, it’s essential to understand the steps you can take to manage and possibly lower your renewal price. This article provides a simple, step-by-step guide on what to do when your car insurance renewal price goes up.
Steps to Handle a Car Insurance Renewal Price Increase
Step 1: Understand Why the Price Increased
The first thing to do is understand the reason for the increase in your premium. Contact your insurer and ask for a detailed explanation. Common reasons include:
- Filing a claim in the previous policy period
- Changes in government taxes, such as GST, are determined by the government.
- Loss or reduction of the No-Claim Bonus due to claims
- Adjustments in coverage, such as adding more features or benefits
- Annual revisions in third-party motor insurance premiums by IRDAI based on factors like inflation, road usage trends, and claims ratios—though not always linked to rising risks or accidents.
By understanding why the renewal price increased, you can make informed decisions on adjusting your policy.
Step 2: Compare Policies from Different Insurers
If you find that your renew car insurance price needs to be lowered, take the opportunity to compare policies from different insurers. There are many insurance providers in India, and each one offers varying rates and benefits.
Use online comparison tools to evaluate different options based on coverage, customer reviews, and premium amounts.
When comparing, make sure to check both comprehensive policies and third-party motor insurance policies. Sometimes, third-party insurance may be more affordable, but remember that it only covers third-party liabilities and is legally required in India.
Comparing policies allows you to shop for a better deal and could help you find lower premiums with similar or even better benefits.
Step 3: Consider Adjusting Your Coverage
Another way to lower your renewal price is by adjusting your coverage. While comprehensive car insurance offers total protection, you may only need some features or add-ons in your policy.
Review optional add-ons like engine protection, roadside assistance, or zero depreciation cover. Removing non-essential features may reduce your premium but should be done carefully to avoid future out-of-pocket expenses, especially for valuable add-ons like zero depreciation for newer cars.
Additionally, you should assess whether third party motor insurance is a better fit for your current needs. While this option covers damages to third parties, it does not cover damages to your vehicle. For older cars, third-party insurance may be sufficient and more affordable.
Step 4: Maximise Your No-Claim Bonus (NCB)
The No-Claim Bonus is a valuable benefit that can reduce your premium if you haven’t made any claims during the previous policy period. If your renewal price has increased because of a reduced NCB, consider ways to avoid this.
For example, avoid making claims for minor repairs that are cheaper to cover out of pocket. By preserving your NCB, you can enjoy discounts of up to 50% on your premium after five claim-free years.
If you switch insurers while keeping your NCB intact, provide proof of the NCB (via a renewal notice or NCB certificate) to the new insurer so they can apply the bonus to your new policy.
Step 5: Explore Discounts and Offers
Many insurance providers offer special discounts and promotions that can help lower your renewal price. If you switch insurers while keeping your NCB intact, provide proof of the NCB (via a renewal notice or NCB certificate) to the new insurer so they can apply the bonus to your new policy. Be sure to ask your insurer about any available discounts that may apply to your situation.
In some cases, you may also be able to lower your premium by paying for a higher deductible. While this increases the amount you pay out of pocket for any claims, it can significantly reduce the cost of your annual premium.
Conclusion
Increasing your renew car insurance price doesn’t have to catch you off guard. By understanding the reasons behind the increase, comparing policies, carefully adjusting coverage, and maximising your NCB, you can ensure you’re getting the best deal possible.
Additionally, exploring available discounts and offers can further reduce your premium. Whether you opt for comprehensive or third party motor insurance, being proactive about your car insurance renewal will ensure you’re adequately covered without paying more than necessary.
