Car Insurance Renewal: 6 Costly Mistakes To Avoid Before Paying Premium

For many car owners, renewing car insurance is an annual chore. Some simply continue with their existing insurer. Others pick the cheapest premium they can find. Both approaches can leave them overlooking important details that could make a difference when they file a claim.

A quick review of the policy before renewal can help avoid unnecessary expenses and ensure the vehicle remains adequately protected. Pooja Yadav, Chief Product Officer at Zuno General Insurance, highlights six common mistakes motorists should avoid while renewing their car insurance.

1. Choosing The Cheapest Policy Without Checking Coverage

A lower premium may look attractive, but it does not necessarily mean better value. Car owners should check what the policy covers, its exclusions and the amount they may have to pay themselves during a claim. The objective should be to find a policy that balances affordability with adequate protection.

2. Ignoring Add-Ons That Protect Expensive Car Components

Standard insurance may not cover every repair expense. Add-ons such as zero depreciation, roadside assistance and engine protection can provide additional coverage, depending on the policy. Engine protection, for instance, may cover specified engine and gearbox damage, including certain water-ingress incidents caused by waterlogging. Electric vehicle owners should also check whether their policy offers relevant protection for battery systems and charging-related risks. "Car owners should evaluate add-ons based on their vehicle, driving conditions and usage rather than opting for them blindly," Pooja Yadav of Zuno General Insurance told NDTV.

3. Forgetting To Check The No Claim Bonus

A No Claim Bonus (NCB) rewards policyholders for not making claims during the policy period. It can significantly reduce the own-damage premium. However, motorists sometimes overlook this discount while renewing their policies. Check whether the applicable NCB has been included in the renewal quote. Those switching insurers should also ensure that their eligible bonus is transferred correctly.

4. Renewing Car Insurance At The Last Minute

Waiting until the final day can leave little time to compare policies, review coverage or correct errors. Renewing before expiry gives motorists an opportunity to evaluate their options without rushing. They should also verify vehicle details, add-ons and coverage limits before making the payment. If the policy has already expired, motorists should check the insurer's renewal requirements before driving the vehicle.

5. Not Checking The Insured Declared Value

The Insured Declared Value (IDV) represents the insured value of the vehicle for insurance purposes. It is also the basis for determining the amount payable in case of theft or total loss, subject to policy terms. A higher IDV can increase the own-damage premium, while a lower IDV could reduce the amount payable in certain claims. At renewal, car owners should check whether the IDV is reasonable considering the vehicle's age, make and model. Yadav advises motorists to look beyond the premium and evaluate the coverage and insured value together while making renewal decisions.

6. Not Aligning Own-Damage And Third-Party Insurance Renewals

Many car owners have different renewal dates for their Own Damage (OD) and Third-Party (TP) insurance policies. This happens because TP insurance may have a longer tenure, while OD cover is renewed annually. Keeping track of two separate dates can become inconvenient. Some insurers offer flexible OD policy tenures that allow customers to align their renewal dates with their existing TP cover, subject to availability and policy terms. Such options can make future renewals easier to manage and reduce the chances of overlooking either policy.

Car Insurance Renewal: What Should You Remember?

Car insurance renewal is more than just paying the premium. Checking the IDV, NCB, add-ons and policy exclusions can help motorists avoid unpleasant surprises during a claim. "Renewal is an opportunity for customers to reassess whether their insurance continues to meet their needs. A little attention to policy details can help them make more informed decisions," added Pooja Yadav.