Car insurance renewal: save money with these tips
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Car insurance is mandatory in India as per the Motor Vehicles Act. When buying a new car, a one-year insurance cover is compulsory. After that, it’s the owner’s responsibility to renew it. Most car owners simply renew their existing policy without checking if there are better options available.
With so many insurers in the market, a quick comparison can help you save money. Whether you want to continue with your current insurer or switch, reviewing your car insurance renewal options is a smart move. Here’s how you can get the best deal.
Compare before you renew
Many insurers update their premium rates and coverage benefits every year. Instead of renewing your policy without checking, take a few minutes to compare. The easiest way to do this is by looking up a car insurance policy online.
Things to check while comparing policies:
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There are several websites that let you compare policies instantly. A little research can help you find the best price without compromising on coverage.
Know your car’s value before renewal
Your insurance premium is calculated based on your car’s Insured Declared Value (IDV). This is the current market value of your vehicle after accounting for depreciation. If your IDV is set too high, you’ll pay a higher premium. If it’s too low, you may not get enough coverage in case of damage or theft.
Here’s how depreciation affects your car insurance renewal online:
| Age of Vehicle | Depreciation for IDV (%) |
|---|---|
| Up to 6 months | 5% |
| 6 months - 1 year | 15% |
| 1 - 2 years | 20% |
| 2 - 3 years | 30% |
| 3 - 4 years | 40% |
| 4 - 5 years | 50% |
If your insurer calculates a higher IDV than necessary, you could be overpaying on premiums.
Claim your no claim bonus (NCB) discount
If you haven’t made a claim in the previous year, you’re eligible for a No Claim Bonus (NCB). This discount is applied to your renewal premium and can significantly reduce costs.
| Claim-Free Years | NCB Discount (%) |
|---|---|
| 1 Year | 20% |
| 2 Years | 25% |
| 3 Years | 35% |
| 4 Years | 45% |
| 5 Years | 50% |
Important points about NCB:
- It applies even if you switch insurers
- You can accumulate up to 50% discount over five years
- If you make a claim, the NCB resets to zero
Before renewing your policy, check if your insurer has applied the correct NCB discount.
Review add-ons and remove unnecessary ones
Add-ons like zero depreciation, engine protection, and roadside assistance provide extra benefits, but they also increase the premium.
What to do:
- Keep only the add-ons that are useful for your car
- Remove features you don’t need anymore
- Check if your insurer has changed the add-on terms
Optimising your add-ons can help lower your car insurance renewal cost.
Increase voluntary deductible for lower premiums
A voluntary deductible is the amount you choose to pay out of pocket before your insurer covers the rest of a claim. Opting for a higher deductible lowers your car insurance renewal premium. This works best if you’re a safe driver and rarely make claims, but choose an amount you can afford in case of an accident.
Example:
Let’s say your car insurance offers two voluntary deductible options: ₹2,000 and ₹5,000. If you choose the ₹5,000 deductible, your premium will be lower than if you opt for ₹2,000. However, in case of an accident, you’ll have to pay ₹5,000 out of pocket before the insurance covers the rest.
This is a smart way to reduce your car insurance renewal cost, especially if you’re a cautious driver and rarely make claims.
Renew before your policy expires
Renewing your policy before it expires is important for two reasons:
- You avoid price hikes and penalties
- You continue to enjoy uninterrupted coverage
It is recommended to renew at least 45 days before expiry to avoid last-minute issues.
Use anti-theft devices for discounts
Installing a certified anti-theft device in your car can reduce your premium. Insurers offer discounts for cars with added security features like:
- GPS trackers
- Steering locks
- Alarm systems
If your car has one of these, inform your insurer to claim a discount.
Final thoughts
Renewing your car insurance policy online isn’t just about making a payment. A little research and the right choices can help you save money while ensuring the best coverage. The best part? You can do it all from the comfort of your home with a hassle-free process.
With Zuno Car Insurance, you get comprehensive protection, including own damage, third-party, and personal accident cover, along with 10 add-ons for extra security. Our seamless renewal process ensures you stay covered without any hassle. Drive worry-free, knowing you have reliable coverage when you need it most.
ARN: Zuno/Blog/DM/Car insurance renewal: save money with these tips/02/25/47
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Disclaimer
Zuno General Insurance Limited does not assume any liability for actions taken based on the information contained in this blog. All insurance products and services are subject to the terms and conditions of the specific policy. Coverage and pricing may vary based on individual circumstances and eligibility.
