• Is It Worth Staying Loyal To Your Same Car Insurance Plan?

    Car Insurance
    • Protect yourself with third party or comprehensive cover
    • Use bumper to bumper policies to reduce your liability
    • Enjoy facilities like zero depreciation and roadside assistance covers

    India is a booming market for every sector. Therefore, the number of people who can be customers to a company is also high. Insurance is a fiercely competitive sector where companies are hungry for sales and they aim to improve their business with a larger customer base.

    To hold back their customers from switching to a different car insurer, insurance companies offer many perks to customers. As customers, whenever the insurance company offers discounts, loyalty points, etc. on your car insurance, it is natural to feel obligated to stay back with one insurer and enjoy the convenience and the comfort provided by the company. However, have you wondered if there are any downsides to this?

    Work and other daily commitments make it difficult to pay attention to the motor insurance policy that we own. The insurance companies bank on this and woo their customers with facilities like door step service, online policy renewals, etc. It may be possible that many of you might not even have taken a look at the car insurance policy renewal certificate to know the details of the payment. The insurer may or may not have offered you the discounts and bonus applicable for staying loyal to the company. Therefore, it is important to understand both the negatives and positives of staying only with one insurer for a longer period.

    Upside of your loyalty:

    • If you are a safe driver, it means that the number of claims are very less or none. Car insurance providers offer incentives and discounts on the policy at the time of renewal.
    • No-claim bonus can be availed if you have not claimed the insurance policy during the policy term. So, if you stay with the same insurer for longer period, then the percentage of your no-claim bonus will also increase if you have not claimed the policy for more than 1 year.
    • Few insurers also offer discounts on deductibles for loyalty, thereby decreasing the money you have to bear while claiming the car insurance policy. However, this depends on each insurer and the policy track record you hold.
    • Few insurers offer ‘accident forgiveness’ for staying loyal and for not claiming the insurance plan for several years. This can be earned when the policyholder does not claim the insurance plan for many policy years. If in case you get into an accident after a significant amount of time and make an accidental claim, the first instance of claim will not affect the renewal premium amount. Hence, it is known as accidental forgiveness.
    • From the same insurer, if you buy more than one car insurance, the insurer may offer a multi-insurance policy discount.

    Down side of Loyalty:

    • It is important to browse car insurance plans once in a while to know new plans, upgrades, and offers provided by various insurers. If you stay comfortable with just one insurer, you may miss out on some discounts on the same plan offered by others.
    • Since there are so many insurance providers in the market, it is possible that a different insurer is offering the same plan benefits and facilities at much lower rates. This means that you could be paying a higher premium for the same package.
    • The discount and perks the insurer provided you last year may not be offered in the subsequent year as well. Insurance companies calculate the premium in a smart way, where you would feel that they have provided a discount by looking at the receipt, but it is only a possibility.
    • When you stay with the same insurer for longer, the renewal amount may get expensive with each passing year due to various factors. Whereas, if you switch the insurer, you may get joining bonus, no-claim bonus, etc. which will reduce the premium amount thereby saving you a few thousands which could be used to upgrade any feature of your car.
    • Insurers are constantly reinventing their plans with upgrades and added benefits. So if your insurer does not offer you an upgrade on the plan or introduce new plans, while on the same plan other insurers are providing new benefits, staying loyal may not offer you the perks that you deserve.

    Hence, to answer your question, the benefits and facilities that are provided while you change your insurer depend upon the insurer you chose. However, it is possible to negotiate with your current insurer to upgrade the policy and provide you with some discounts for renewal premium amount. But if you are looking to change the insurer, then make sure to get a deal that is worth your time. You can easily browse for any plans online on either insurer’s website or on any neutral third-party website to compare the plans.

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