While renewing your insurance may seem like a fairly straightforward process, and it usually is, there are definitely some complexities to factor in. Read on to know more!
Essentially, an insurance renewal is needed after the fixed length of time in which an insurance policy is in effect without adjusting the rate. Although there is wiggle room, and it is technically possible for your rate to change after buying a policy in case you do not meet certain guidelines. While there are many different kinds of insurance, in this blog, we will cover some general factors to consider while renewing any type of insurance policy.
#1. Revisit the coverage
Not revisiting your coverage before renewal tends is a rookie mistake that a lot of people make. This is especially true of first-time automobile or motorcycle owners. Way before the renewal date, begin to review your policy cover and identify add-ons that may be inconsequential to you. For example, a Passenger Cover may be a complete waste of money if you usually commute alone, so you can save a lot by dropping that cover. Be very selective with your add-ons and only add what you truly need.
#2. Take the appropriate action
This would vary depending on the kind of insurance you are renewing. Put simply, you need to pay attention to the information you have provided. This is not about the coverage itself. This is about the finer details, such as errors in personal information. Scan the documents carefully to make sure that everything is up to date and correctly spelled. Updating your personal information is an easy process during renewals. In some policies, this is also a good time to add assets to your policy. Did you recently purchase a new car? If so, adding said car to your automobile insurance is important, and the best time to do so is while renewing your current policy.
#3. Prepare for a rise in the rate
Again, this differs greatly from insurance type to insurance type to insurance type, but broadly, do prepare for an increase in rates. There are many factors that contribute to a higher rate during renewal. For eg, if your driving record has changed because you received a ticket, or you were guilty of a traffic violation or were involved in an accident – these are cases where you can definitely expect a hike in the premium. So, depending on your usage and record your interest rate will likely be influenced.
#4. Check your options for changing your coverage
If you’re not happy with your coverage, for whatever reason, this may be a good time to revisit. Broadly speaking, most auto insurance can be changed or transferred in the midst of renewals, but the same cannot be said for two-wheelers, vans or boats. At large, most insurance companies will limit changes on policies to renewals only. It’s usually not an issue to add a vehicle but modifying your coverage on existing vehicles may be harder. Check your options to see what the best move would be.
#5. Be wary of a rate increase before the date of renewal
Occasionally your rates may change even before renewal. This usually happens when the insurance company adds on a fee or a charge of some sort. There are many reasons for such fees, the most common is not making your previous payments on time. Missing payment schedules could earn you a late fee. So, if you’re getting charged more than usual while making your premium payment on renewal, it may not be a new renewal rate. It’s most likely a late fee or a fee for violating the terms and conditions agreed upon in your policy. While this is cause for concern, the good news is that with many insurance companies and policies, the late fees may be revoked or absorbed as your record improves.
In conclusion, insurance policy renewals are a mechanical and standard process with most kinds of insurance. That said, if you’re not aware of the details you may miss a better deal or may make a mistake. We hope these pointers will help you navigate the complexity as it exists. And lastly, please do keep an eye out for your policy renewal date – don’t lose the coverage.