When your current car insurance policy nears its end, you face a fork in the road. One path is familiar: a simple renewal with your existing provider, a loyal companion you’ve trusted through the miles.
The other path involves exploring the market anew, seeking out a potentially better partner for the journey ahead. In this blog, let’s explore the 2 paths of car insurance renewal and new policy buying and understand which one suits you the most.
Difference Between Car Insurance Renewal and Buying a New Policy
When it comes to insurance, buying a new policy and renewing it are 2 essential aspects of continued protection. But this decision largely depends on your situation. So, to clear the confusion, let’s understand its differences:
| Aspect | Car Insurance Renewal | New Car Insurance |
| Process | Simpler compared to buying a new policy | Requires research and customisation |
| Vehicle Inspection | Not mandatory | Physical inspection is necessary before the policy |
| Documentation | Minimal or no documentation | Extensive documentation required |
| Premium | Loyalty discounts available | Online discounts and other discounts are available |
| Comparison | Not needed and can be tricky | Easily compare various plans in the market |
Why Should You Choose Car Insurance Renewal?
Car insurance renewal is an easy way to continue your benefits and get financial coverage. Let’s dive into the details:
- Financial Liability
Without renewed car insurance, you will no longer get any coverage. So, if your car damages anyone else’s property, you will have to spend your money on compensation. Therefore, timely renewal is crucial for continued coverage for your finances and your car.
- Legal Issues
Apart from a coverage lapse, a lack of car insurance can land you in legal trouble. Driving a car without insurance is a crime, and you could be fined ₹2,000 to ₹4,000. Plus, any accidents could also land you in court, which requires hefty fees. So, renewing your car insurance saves you money while protecting your assets.
- Hike in Premium
Lastly, if you do not renew your car insurance within the 30-day grace period, you could lose all benefits and the accumulated no-claim bonus. This means you have to buy another policy, where you have to restart your entire journey, leading to a hike in premiums.
Why Should You Buy New Car Insurance?
Investing in a new car insurance policy is a wise decision for every car owner in India. Here are the reasons why:
- Motor Vehicles Act
According to the Motor Vehicles Act of 1988, having at least third-party insurance is mandatory in India. Without it, you may face legal fines and imprisonment of up to 3 months. A third-party car insurance provides you with financial protection if your car injures someone or damages their property/asset.
- Coverage Beyond Third-Party
In India, apart from third-party car insurance, companies offer comprehensive coverage. In this, you can protect both your car and third-party liabilities. It not only reduces your financial burdens significantly, but also encourages people to invest in car insurance.
- Financial Support to Family
Many insurance providers also offer personal accident cover, wherein family members get compensation upon the death of a policyholder. Moreover, car insurance plans come with various add-ons which can truly make your journey hassle-free and safe.
Which One Should You Choose?
Now that you know the benefits of both car insurance renewal and buying a new policy, the question arises: which one should you choose?
The answer is simple: both. When you buy a new car, you need to buy a new policy. Research thoroughly about the benefits and take your needs into account. However, just purchasing a policy is not enough. You need to renew it every year to experience continued coverage.
While this is a common procedure, another scenario calls for a different decision. If you already have a car insurance policy, renewing it would be the best decision. This is because you will need to pay less premium, and all the benefits you’ve accumulated will continue as well.
Here, if you buy a new policy, you will lose every no-claim bonus and may have to pay more in premiums.
Final Thoughts
Ultimately, the choice between car insurance renewal and venturing into the market for a new one is deeply personal. The ‘better’ choice is the one that best aligns with your current financial goals and desired level of commitment. While renewing car insurance online, you can change the parameters of your plan and customise it according to your current needs. However, if you are buying one from scratch, don’t forget to search the market, compare quotes and explore plans with various add-ons.
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