Did you know, not renewing your car insurance in time is one of the biggest damages that you can cause to your finances? A lot of us just do not take car insurance renewal as seriously as we should. The reasons vary from being incredibly busy with life and work to being blatantly lazy at times. Irrespective of what the reason is, driving without a car insurance is not only dangerous but hazardous for your budget as well.
If you do not renew car insurance in time, you stand the risk of paying hefty fines to the traffic police department. Or even worse, a possibility of imprisonment for up to 3 months. Not having an insurance also makes you financially vulnerable. Should there be an incident in the meanwhile, you will have to pay for the damages from your pockets. And you also run into the risk of losing out a few benefits of your existing plan by not renewing in time.
While you can do online car insurance renewal, one must not rush into it. There are quite a few common mistakes that individuals make during car insurance renewal. The following pointers will help you avoid some of them so that you can make the most of your policy.
#1 Don’t Let Your Policy Lapse
As mentioned earlier, it not only is illegal to drive without an insurance policy but this can have lots of financial implications as well. If you let your policy lapse and miss out even the grace period, you will have to get a new policy altogether. Which might involve getting your vehicle inspected for damages. It not only lengthens the process but at times makes it a bit more expensive as well. And then you also run into a scenario where you might miss out the NCB or no claims bonus.
#2 Incorrect Personal Details
At times, a lot of policy buyers forget to mention some crucial personal details during the policy renewal. Though it might be an honest mistake, it does qualify as insurance fraud. If you make any claims in such circumstances, it can lead to rejections and in worse conditions might lose the policy cover as well.
#3 Incorrect Name
During your car insurance renewal, it is extremely important to keep your name consistent. The name should be consistent across the previous policy, RC and newly applied policy. This might seem a rather simple point but failing to do so might deem your policy as invalid.
#4 Not Selecting Appropriate NCB
NCB or no claims bonus is one of the most significant discounts that you get when you renew car insurance. However, it is equally important to select the correct discount. There have been several instances where policyholders select a higher amount to get better discounts. However, it comes across as insurance fraud and you wouldn’t want to get into the same.
#5 Not Selecting Appropriate IDV
In simple terms, you can think of IDV or insured declared value as the sum assured for the car insurance policy. If your car were to be stolen or damaged beyond repair, the IDV is what your insurer will pay you at the maximum.
Policyholders usually tend to reduce the IDV so as to bring down the premium costs. However, this might impact the claims. In the case of an accident, you will end up being compensated for a lower amount. Thus, selecting the right IDV is important.
#6 Forgetting To Mention a Nominee
In an unfortunate event of something happening to the policyholder, it’s the nominee who will receive any benefits or compensations. Thus, it is critical to update the nominee details while renewing your vehicle insurance. If you had missed out naming someone as the nominee, it is time to set it right.
#7 Not Updating Hypothecation Details
If your vehicle is on finance of any sort, it is important to update the hypothecation details during your online car insurance renewal. These seemingly small mistakes can cost you dearly at a later date. In fact, incorrect hypothecation details can take you to the court if you claim your policy.
Renewing your policy in time is always a good habit, which you can extend to different policies as well. And given the growing number of vehicles on the road, the chances and probability of accidents are also on the rise. Keeping the above points in mind will help you renew the policy without any issues and prevent you from committing the common mistakes.