How does a motor vehicle owner ensure the safety of the vehicle without much financial impact? Whether someone has a two-wheeler or a four-wheeler, a motor insurance policy is important. According to the Motor Vehicles Act of 1988, all cars must be insured with at least a third-party liability cover, a type of motor insurance policy, to drive on Indian roads.
Motor insurance is a contract between a registered car owner and the insurance provider. It safeguards the owner against unforeseen dangers related to the car’s use. The insurance policy primarily provides coverage against accidental damage to the car, third-party liabilities, and theft.
A vehicle insurance policy usually has a one-year tenure. You need to renew your motor insurance plan before the expiry of the existing plan, so your vehicle remains covered. Let’s find out about the features and benefits of vehicle insurance renewal for a better understanding.
Features of Motor Insurance Renewal
The top features that make motor insurance renewal a necessity include the following:
- Seamless renewal of policy
Motor vehicle insurance providers have simplified the entire renewal process. You can renew coverage for your vehicle in a few simple clicks online.
- Protection of no-claim bonus (NCB)
Most motor insurance policies come with an NCB clause. This allows policy owners to bring down the premium of their motor insurance renewal if they have not made any claims for a year. The bonus increases with every passing year and can go up to 80% of the total premium value with some insurance providers. However, if you do not renew your vehicle insurance policy in time, you will lose the benefits of the clause.
- Social and lawful obligation
Under the Motor Vehicles Act of 1988, your vehicle must be covered under a third-party policy. If you fail to get the motor insurance policy for your vehicle, you could be charged with a severe penalty.
Socially, timely renewing your motor insurance policy ensures financial stability for you as well as the third party in case of road mishaps.
- Mandatory as per bank clauses
If you pledge your vehicle to avail of a loan, your bank would need you to meet a few requirements. Being covered with a motor insurance policy is mandatory to be eligible for the loan.
- Direct settlement of claims
Coverage of your vehicle improves the chances of easy claim settlement. Most insurance companies have direct tie-ups with leading motor workshops that can assure quick repair in case a repair claim is made.
Coverage Granted Under Motor Insurance Policies
- Cover against accidental damage
Accidental damage to the vehicle can mean huge financial losses for the car owner if the vehicle is not covered. A motor insurance policy eliminates the risk of such a loss. The coverage includes repairs, replacements, and tending that the vehicle may need. Other benefits that the policy may provide are coverage against malicious damage in the form of riots and strikes and other perils.
- Cover against theft of the vehicle
The financial losses a vehicle owner may suffer due to theft can be a lot. Vehicle coverage can insure you against such losses.
- Liability against the third party
Sometimes, a vehicle may get involved in a third-party liability due to damage done to such party through an accident, collision, or brush-through. Such claims the said party makes can result in great financial liability creation. An insurance policy for the vehicle with a third-party liability cover takes care of such issues.
- Coverage for personal accident
The motor insurance policy covers liability arising from permanent disability in case it occurred in an accident that your vehicle met. It also encompasses the death by accident of the passengers in the car. The policy covers compensation for the paid driver. Such benefits are provided under the Workmen’s Compensation Act.
- Add-on covers
You must always consider checking add-on covers to the policy. These add-ons are benefits available over and above the cost of insurance premiums. You need to pay an increased premium value to get these add-ons.
How to Renew Motor Insurance Policy?
With the introduction of motor insurance renewal online, you don’t need to wait for an agent to help you with the process. Online renewal saves you time and effort. Below are the steps you need to follow.
- Visit the official website of your insurance company.
- Access the ‘motor insurance renewal’ page on the website.
- Click on the coverage that you want.
- Choose the add-on covers (not compulsory).
- Pay the premium using one of the online payment gateways.
- Download the policy copy once the same gets generated.
You can pay your insurance policy premium through net banking, UPI, credit/debit cards, etc. For offline renewals, you can choose either cash or cheque.
You should be careful while choosing an insurance company. Always ensure that the company has a credible claim settlement track record and a high settlement ratio. The post-claim services of an insurer outweigh the premium cost-effectiveness.
It is crucial to keep track of when your existing motor insurance policy ends for the timely renewal of coverage benefits. Make sure your vehicle is covered with a policy to avoid unpleasant financial consequences that may arise out of unforeseen events. You will find more articles on motor insurance renewal on Piramal Finance. It is an online platform allowing you to learn everything you need to know about insurance and policy renewals. For other facts about personal loans, credit cards and financial management, check out the blogs on our website!