Renewing car insurance in India sounds simple—but most people make small mistakes that lead to higher premiums, claim rejections, or reduced coverage later. Understanding these mistakes and fixing them during renewal can save you thousands of rupees every year.
This guide explains the top 5 renewal mistakes, real examples, how to avoid them, smart tips to reduce your premium, and FAQs.
🚫 Mistake 1: Renewing the Policy in a Hurry Without Comparing Plans
Most people renew their car insurance with the same insurer because it’s “easy.”
But premium amounts and add-ons vary widely between companies.
Example:
A 2020 Swift owner renewed his comprehensive policy without checking other insurers.
Later he found a competitor offering ₹1,700 cheaper premium + Zero Dep add-on included.
How to Avoid This Mistake
✔ Compare at least 3–5 insurance providers online
✔ Check:
- Premium
- IDV (Insured Declared Value)
- Cashless garages
- Add-ons included
✔ Use comparison websites before paying.
🚫 Mistake 2: Choosing the Lowest Premium and Ignoring Coverage
Low premium often means:
- Lower IDV (which reduces claim amount)
- No add-ons
- High deductible
- Low-quality claim service
Example:
A car owner selected a very low premium plan, but the insurer had only 8 cashless garages in his city.
During repair, he had to pay the entire bill upfront.
How to Avoid This Mistake
✔ Choose value, not the lowest cost
✔ Pick a balanced plan:
- Proper IDV
- Good network garages
- Necessary add-ons
✔ Read the fine print while renewing.
🚫 Mistake 3: Forgetting to Add Important Add-Ons (Especially Zero Depreciation)
Add-ons significantly improve coverage, but many people skip them during renewal.
Important Add-ons:
- Zero Depreciation (must-have for cars up to 7 years old)
- Engine Protect (critical during floods; top cities like Mumbai/Chennai/Bangalore)
- Roadside Assistance
- Consumables Cover
- Return to Invoice (RTI)
Example:
A car owner with no Zero Dep add-on had an accident.
Repair cost: ₹25,000
Depreciation deducted: ₹9,000
Final claim received: Only ₹16,000
All because he skipped Zero Dep during renewal.
How to Avoid This Mistake
✔ Add Zero Dep for cars under 7 years
✔ Add Engine Protect if you live in flood-prone city
✔ Add RTI for new cars (< 2 years)
🚫 Mistake 4: Letting the Policy Expire Before Renewal
Driving without valid car insurance is illegal and risky.
Once policy lapses:
- You lose No Claim Bonus (NCB)
- Vehicle inspection becomes mandatory
- Premium increases
- Claims may get rejected during the break-in period
Example:
A policy expired for 10 days → The owner lost 50% NCB, resulting in ₹2,800 extra premium.
How to Avoid This Mistake
✔ Renew 10–15 days before expiry
✔ Use insurer reminders & SMS alerts
✔ Enable auto-debit renewal
✔ Keep policy soft copy saved
🚫 Mistake 5: Keeping the Wrong IDV (Too High or Too Low)
IDV (Insured Declared Value) = Maximum payout if your car is stolen or totally damaged.
Common Mistakes:
- Keeping low IDV to reduce premium
- Keeping high IDV for bigger claim
Both are wrong.
Example:
A person set IDV too low:
Car value = ₹7 lakh
He chose IDV = ₹4 lakh to save premium
Car theft → Claim approved only ₹4 lakh
Loss = ₹3 lakh
How to Avoid This Mistake
✔ Keep IDV = Market value of car
✔ Don’t choose extreme high or low
✔ Check IDV range provided by IRDAI
⭐ Bonus Mistake: Not Checking Cashless Garages
People often check premium but ignore cashless repair network.
✔ Always check if your preferred garage is listed
✔ Bigger network = Faster, smoother claim settlement
💡 Tips to Reduce Your Car Insurance Premium During Renewal
- Use Your NCB (No Claim Bonus)
Get 20%–50% discount if you had no claims last year.
- Opt for Voluntary Deductible
Adds some out-of-pocket payment but reduces premium.
- Install Anti-theft Devices
A-RAI-approved devices can lower the cost.
- Choose Long-term Third-party + Short-term Own Damage
Reduces annual liability.
- Avoid Small Claims
Small repairs < ₹1,000–₹2,000 should not be claimed, so NCB stays intact.
- Avoid Unnecessary Add-ons
Choose only what you need.
📝 Best Renewal Practices for 2025
✔ Renew before the expiry date
✔ Compare plans every year
✔ Choose correct IDV
✔ Prefer Comprehensive + Zero Dep for cars under 7 years
✔ Check insurer’s Claim Settlement Ratio (CSR)
✔ Keep documents saved in Digilocker
✔ Review add-ons every year
✔ Don’t blindly auto-renew without reviewing coverage
❓ FAQs on Car Insurance Renewal in India
- Can I change my insurer during renewal?
Yes. You can switch any year without losing NCB.
- What happens if I don’t renew my car insurance on time?
Your policy will lapse, NCB will be lost, and you may need vehicle inspection again.
- Which add-on is a must during renewal?
Zero Depreciation for cars under 7 years old.
- Does renewing online give better discounts?
Often yes—online renewal costs are 5–15% cheaper.
- How is IDV calculated during renewal?
Based on age, depreciation, and current market price of your car.
- Can I claim after policy expiry?
No. Claims made after expiry are rejected.
- Can I increase IDV during renewal?
Yes, but only within the IRDAI-approved range.
