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Everything You Want to Know About Insurance Renewal

Driving an insured vehicle is mandatory under Indian laws as stated under the Motor Vehicles Act 1988 and the recently passed Motor Vehicles (Amendment) Act 2019 and therefore it is an offence to drive without a valid motor liability only insurance. We set reminders to not miss a date or to meet our friends but when it comes to renewal of car insurance policy or a two wheeler insurance policy; we find it difficult to renew them even after being sent repeated reminders from the existing general insurance company.

Moreover, the more time you take to renew the car/bike insurance policy after it lapses, the complicated it gets to renew it.  The best time to get the car/bike insurance renewal done is at least 15 to 20 days prior to the date of expiration.  If the motor insurance policy lies in lapsed state for more than 90 days, you stand to lose the cumulative No Claim Bonus (NCB) amount, if you have not claimed No Claim Bonus for 4 years or more, then you could lose up to 45 to 50 % NCB.

Types of Car/bike Insurance Policies in India

  • Third Party Liability: In this type of motor insurance policy, the motor insurer safeguards you from the liability arising from any bodily injury to the third party or damage to the third party property. As per the Supreme Court order any new two wheeler bought after September 1, 2018 needs to have a mandatory third party insurance of 5 years and for a car it needs to have a mandatory third party insurance of 3 years.

  • Comprehensive Insurance: This plan offers coverage against damages to your vehicle from natural calamities like hurricanes, fire, earthquake, manmade events including riots, strike etc. In addition to this it covers any third party liability in term of death, bodily injury and property damage. Further, It is also mandatory to take personal accident cover for owner driver for a sum insured of Rs 15 lakhs

  • Standalone Own Damage Insurance Policy: This type of insurance policy provides coverage against liabilities arising from damage to your vehicle against theft, fire, flood, earthquake etc. According to a circular from Insurance Regulatory and Development Authority of India (IRDAI) that from September 1, 2019, motor insurance companies would be able to offer separate standalone annual Own Damage cover.

Factors Affecting Insurance Premium

  • Geographical Location: Yes, the city where you decide is an important factor that affects your motor insurance premium. Insurers have classified various locations in country therefore the premium of your insurance policy is affected by the zone in which your city falls in.

  • Type of Insurance Plan: As already discussed there are three types of car/bike insurance plans, the third party insurance is the cheapest but it covers only liability arising from bodily injury to third party or damage to the third party property but in case of comprehensive plan it covers third party liability as well as damage to your own vehicle from natural calamities like fire, earth quake and also manmade events including riots, arson etc. Comprehensive plan is more beneficial as it offers coverage for third party liability and also own damage but comes at higher cost in comparison to Third party liability and standalone own damage insurance policy.

  • Engine Type: The type of Engine and the cubic capacity of the engine affects the premium of your insurance policy, if you have a vehicle which runs on diesel then you would to pay a higher premium and also the premium increases if the cubic capacity of the engine increases.

  • Safety Features: A motor insurance plan offers coverage against possible risks your vehicle might encounter, therefore if you have safety equipment like gear lock, handle lock, airbags and GPS tracking device, the motor insurer would then take a note of this and therefore you might be offered a lower premium.

Switching Insurers

  • If you’re dissatisfied with you current motor insurer then you can opt for a new insurer at the time of insurance policy renewal.

  • However, you need to evaluate the reasons for your decision to switch the motor insurer like better claim settlement ratio or premium.

  • You can also switch insurers at the time of renewal if you feel that other motor insurer offers better Add-On coverage options.

Benefits of Online Renewal of Policies

The foremost advantage of renewing your car/bike insurance policy online is that actual process is really fast unlike the offline process where you had to wait for insurance agent, the whole process involved lot of paperwork making the whole process cumbersome and time consuming.

Renewal of Lapsed Car/bike Insurance Policies

If you are renewing your car break in policy online, us , a surveyor would survey the vehicle and send his report to the insurance company OR you could opt out for self survey of the vehicle   You need to keep documents like Registration certificate , previous policy details, Vehicle details like model name, engine capacity RTO details and registration number ready irrespective of whether you are following online or offline mode of activation.You would be sent a soft copy of the policy immediately on the email id registered with


HDFC ERGO is a brand trusted by 1 crore + customers. The company offers insurance products across categories which include motor, travel, health and home in the retail category and insurance products in property, marine and liability insurance on the corporate side.

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Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales

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