Renewing your car insurance can feel like just another annual chore. But honestly, it’s a bit more than just paying your premium and moving on. You know, Rajesh from Mumbai had to shell out an extra ₹20,000 last year because he missed renewing his Maruti Swift’s policy on time. Ouch! These little mistakes can really burn a hole in your pocket, and often, people don’t even realise the damage until it’s too late. Whether you’re in Bangalore, Chennai, or Delhi, the same blunders pop up everywhere. From getting the Insured Declared Value (IDV) wrong, to forgetting add-ons that could save you during heavy monsoon damage, the pitfalls are many. Even the big players like ICICI Lombard, HDFC ERGO, or Digit warn their customers every renewal season to be cautious. But still, it happens. So, let’s chat about the 7 common car insurance renewal mistakes Indians must avoid — so you’re not that person who ends up paying extra or gets less coverage. Because hey, saving a few thousand rupees here and there, and renewing smartly? That’s just good sense!
#Missing the Renewal Deadline and Facing a Lapse
You know what surprises people? Missing the renewal date can make your car insurance policy lapse. Rajesh’s Swift in Mumbai saw this first hand when the city’s monsoon floods damaged his car. Because his policy had lapsed for just 15 days, the insurer refused the claim, saying the coverage was not continuous. And no, these insurers like Bajaj Allianz or Acko usually don’t offer a grace period beyond 30 days. So, what happens if you miss the date? Your premium shoots up, and you lose the claim-free bonus (NCB) you built over the years.
###What is a Lapse? Simply put, a lapse means your policy coverage is inactive. You lose protection until you renew or buy a new policy. The motor vehicles act actually expects continuous insurance to avoid penalties in most states. If the traffic police catch you, you could also face fines (₹2,000 to ₹5,000 depending on the city).
###How to Avoid It? Set renewal reminders on your phone or use apps from insurers like PolicyBazaar or Coverfox. And if you do miss it, renew within 30 days to avoid a fresh policy and higher premium. Continuing with no gaps saves money and ensures smooth claims later.
What is a Lapse?
Simply put, a lapse means your policy coverage is inactive. You lose protection until you renew or buy a new policy. The motor vehicles act actually expects continuous insurance to avoid penalties in most states. If the traffic police catch you, you could also face fines (₹2,000 to ₹5,000 depending on the city).
How to Avoid It?
Set renewal reminders on your phone or use apps from insurers like PolicyBazaar or Coverfox. And if you do miss it, renew within 30 days to avoid a fresh policy and higher premium. Continuing with no gaps saves money and ensures smooth claims later.
#Underestimating or Overestimating Your Car’s IDV
The Insured Declared Value (IDV) is simply the maximum claim amount your insurer will pay if your car gets stolen or damaged beyond repair. Priya’s Honda City in Bangalore had bought her policy with an IDV much lower than actual market value. Guess what happened when she made a claim after a heavy rainstorm caused water damage? She received just ₹1,20,000, but her car’s market value was close to ₹1,80,000. Not fun, right?
###Why IDV Matters Choosing a low IDV reduces your premium, but means you get less if you file a total loss claim. On the flip side, a very high IDV increases your premium unnecessarily.
###How to Decide IDV Check current market prices of your car model in your city (e.g., Pune or Chennai). Most insurers like HDFC ERGO or ICICI Lombard update IDV annually based on depreciation rates. Don’t just accept the offer blindly; verify it with platforms like OLX or CarDekho.
###Adjusting IDV on Renewal If your car is older, it should have a lower IDV. For a 5-year-old i20 in Delhi, IDV may range around ₹5,00,000 to ₹5,50,000. Review it yearly and make adjustments to avoid paying too much or getting shortchanged.
Why IDV Matters
Choosing a low IDV reduces your premium, but means you get less if you file a total loss claim. On the flip side, a very high IDV increases your premium unnecessarily.
How to Decide IDV
Check current market prices of your car model in your city (e.g., Pune or Chennai). Most insurers like HDFC ERGO or ICICI Lombard update IDV annually based on depreciation rates. Don’t just accept the offer blindly; verify it with platforms like OLX or CarDekho.
Adjusting IDV on Renewal
If your car is older, it should have a lower IDV. For a 5-year-old i20 in Delhi, IDV may range around ₹5,00,000 to ₹5,50,000. Review it yearly and make adjustments to avoid paying too much or getting shortchanged.
Skipping Essential Add-Ons That Can Save Big
Add-ons like zero depreciation cover or engine protection seem like extra charges when you renew your policy. But man, these can save heaps when monsoon or city traffic messes with your car.
###Zero Depreciation Cover For example, Anjali’s Nexon in Pune got scratched badly in a narrow lane accident. Because she had zero depreciation cover bought from Bajaj Allianz, she paid just ₹7,000 out of pocket, and the insurer covered the rest. Without this, she would’ve forked out close to ₹30,000.
###Engine and Gearbox Protection Especially in Chennai where waterlogging is common, engine protection add-ons are lifesavers. Imagine Rajesh’s i20 stalled because water got into the engine – those repair bills can be ₹25,000-30,000 easily. Add-ons reduce these costs.
###What Add-Ons to Consider Besides zero depreciation and engine cover, theft protection, roadside assistance, and consumable covers are handy. Digit offers flexible add-on packs to match your budget.
Zero Depreciation Cover
For example, Anjali’s Nexon in Pune got scratched badly in a narrow lane accident. Because she had zero depreciation cover bought from Bajaj Allianz, she paid just ₹7,000 out of pocket, and the insurer covered the rest. Without this, she would’ve forked out close to ₹30,000.
Engine and Gearbox Protection
Especially in Chennai where waterlogging is common, engine protection add-ons are lifesavers. Imagine Rajesh’s i20 stalled because water got into the engine – those repair bills can be ₹25,000-30,000 easily. Add-ons reduce these costs.
What Add-Ons to Consider
Besides zero depreciation and engine cover, theft protection, roadside assistance, and consumable covers are handy. Digit offers flexible add-on packs to match your budget.
Ignoring No Claim Bonus (NCB) and Its Transfer Rules
NCB is one of the sweetest benefits in car insurance renewal. But many miss out or don’t understand how it works.
###What is No Claim Bonus? Simply put, it’s a discount on your premium for every claim-free year. Priya in Bangalore used her 3-year NCB and saved nearly ₹4,500 on her renewed Honda City insurance premium which was ₹17,800.
###Common Mistakes with NCB Switching insurers can cause confusion. Some think NCB gets lost if you change company. But with insurers like Acko and ICICI Lombard, NCB is transferable, provided you produce a valid NCB certificate. Many don’t claim these certificates and lose the benefit.
###How to Safeguard NCB Always ask your insurer for an NCB certificate before renewal or switching. If you’ve claimed last year, NCB resets to zero. Keeping track can help you save big on premium especially if you live in heavy traffic cities like Delhi or Mumbai where accidents are common.
What is No Claim Bonus?
Simply put, it’s a discount on your premium for every claim-free year. Priya in Bangalore used her 3-year NCB and saved nearly ₹4,500 on her renewed Honda City insurance premium which was ₹17,800.
Common Mistakes with NCB
Switching insurers can cause confusion. Some think NCB gets lost if you change company. But with insurers like Acko and ICICI Lombard, NCB is transferable, provided you produce a valid NCB certificate. Many don’t claim these certificates and lose the benefit.
How to Safeguard NCB
Always ask your insurer for an NCB certificate before renewal or switching. If you’ve claimed last year, NCB resets to zero. Keeping track can help you save big on premium especially if you live in heavy traffic cities like Delhi or Mumbai where accidents are common.
🎯 Key Takeaways
- Never let your policy lapse; set reminders to renew on time.
- Get the correct IDV based on your car’s actual market value.
- Include important add-ons like zero depreciation and engine protection.
- Always safeguard and transfer your No Claim Bonus when switching insurers.
- Check and update your policy details every renewal to avoid surprises.
❓ Frequently Asked Questions
What happens if I miss my car insurance renewal date in India?
If you miss your renewal date, your policy can lapse, meaning no coverage. You may also lose your claim-free bonus and face higher premiums when you renew. Plus, driving an uninsured vehicle in cities like Mumbai or Bangalore can attract fines ranging ₹2,000 to ₹5,000 under the Motor Vehicles Act.
How do I check the right IDV for my car insurance renewal?
To find the right IDV, check your car’s current market value based on your city and model age. Insurers usually calculate it using depreciation rates. You can cross-verify on platforms like OLX or CarDekho to ensure you’re not under or over-insuring your vehicle.
Are add-ons necessary for car insurance renewal?
Add-ons like zero depreciation cover or engine protection are not compulsory but highly recommended. They can save thousands during repairs, especially in monsoon-hit cities like Chennai or flood-prone Mumbai. Think of add-ons as investments in peace of mind during emergencies.
Can I transfer my No Claim Bonus (NCB) when switching insurers?
Yes, you can transfer your NCB between insurers like ICICI Lombard, Acko, and Bajaj Allianz, as long as you have a valid NCB certificate from your current insurer. Make sure to request this certificate before switching to save on your premium at renewal.
Why is it important to renew car insurance before expiry?
Renewing on time ensures continuous coverage and protects you from hefty fines under the Motor Vehicles Act. Also, timely renewal keeps your NCB intact, which helps reduce your premium. Otherwise, a policy lapse could mean you’re uninsured during accidents or theft.
What should I do if I want to change add-ons during renewal?
You can customize add-ons during renewal based on your needs and budget. If you live in waterlogging-prone cities like Chennai, adding engine protection makes sense. Insurers like Digit and HDFC ERGO offer flexible add-on packs that you can select or drop each year.
Final Thoughts
Look, renewing your car insurance isn’t just about ticking a box and paying the premium. Avoid these common mistakes — and you’re actually saving money and hassle down the line. Whether it’s not forgetting renewal dates, setting the right IDV, adding smart coverage options, or safeguarding your No Claim Bonus, a little attention goes a long way. And hey, it’s easy to do if you stay informed and proactive. So next time you see your renewal notice from ICICI Lombard or Acko, take a moment. Check everything carefully. Avoid the pitfalls you now know about. Your car – and wallet – will thank you. Ready to renew smarter? Good!