Buying a car of your choice or dreams is an aspiration that a lot many of us have. If you do not believe in this statement, perhaps the record-breaking car sales figures, year on year will provide you with a much clearer picture. Irrespective of that, more and more people are buying cars. And one of the most important things undeniable while buying or owning a car, is the insurance.
For the ones who are not aware, the Motor Vehicles Act of 1988, mandates all the vehicles to have a valid car insurance. Though the same states that a Third-Party Liability cover is the minimum requirement, a Comprehensive Policy is recommended.
It is quite common for dealers to offer you a car insurance when you drive your car out of a showroom. However, on the completion of the first year, you must renew car insurance policy to continue cherishing its benefits. And it is usually at the end of such terms that the car owners are confused with the same question: “Should they continue or try out a different policy?” Now, let’s have a look at the pros and cons of renewing your motor insurance policy for years.
The Cons of renewing your motor insurance policy for years:
Each coin has two sides and the same is valid for car insurance policies as well. When you choose to continuously be renewing your motor insurance policy for years, there are a few pros and a few cons. The following are some of the demerits of continuing with the same policy-
Insufficient Coverage
Every few years, there are certain changes to the existing norms, rules and regulations. In such cases, you do not want to feel left out due to continuance of the same policy. Similarly, it is crucial to read the policy documents carefully and thoroughly during the renewal cycle.
This way, you can avoid any discrepancies, and you can always opt for a different policy, whenever needed. There also have been few instances, where an insurer tweaks the policy slightly. If you are unhappy with such changes, continuing with the policy wouldn’t make any sense.
Higher Payments
The probability of you continuing with an insurer is high when you have a comfortable relationship with them and since the policy premiums don’t increase as such, a car owner is not bothered by the same.
However, it is during the renewal cycles that you can substantially save on your car insurance policies, by comparison. When you compare different policies, you get to know what other insurers are offering for a similar car and what other prospects are included under similar coverage.
The Pros of renewing your motor insurance policy for years:
Now that we have discussed the cons of continuing with the same insurer, pros also follow. Insurers offer a lot of perks and benefits for continuing with them, for a longer tenure. Here are some of the major benefits should you choose to continue:
Lower Deductibles:
A few insurance companies are known to reduce the mandatory deductibles that you must pay during a claim. This is mostly offered as a loyalty bonus. Of course, it depends on a few factors such as the claims that you have made in the recent years, premium, type of car etc. Though it doesn’t help you save money up front, you can enjoy the benefits during claims.
NCB:
The NCB or No-claims bonus is a discount that insurers offer if you haven’t claimed the policy in your previous term. To benefit from the same, you need to ensure that there isn’t a break in between and that you do not file for a claim. The discounts start at a minimum of 20% for the first claim-free year and go all the way up to 50% in next five year. NCB, being a cumulative discount, offers better savings.
Accidents:
A few of the insurers allow you to continue without an increment in the premiums, even after you have filed for an accident claim. It absolutely makes sense to continue with such insurers for a bit longer. The simple reason being that you cannot transfer such benefits when you shift to a new insurer.
Additional Costs:
When you continue with the same insurer, you get to keep all the loyalty perks and benefits. Should you switch to a new insurer, you will end up paying some of the expenses related to starting a new plan and policy fees.
With the described pros and cons of renewing your motor insurance policy for years, it solely remains your decision to either continue or discontinue your relationship with an insurer.