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Car Insurance Loyalty - Merits and Demerits

From shopping for garments to household essentials, customer loyalty is something that will be beneficial to a shopper at all times. However, the same cannot be extended to the case of motor insurance. It is often heard that shopping for car insurance at the end of 2 or 3 years is essential to get a policy that yields significant savings. But you should know that staying loyal to your insurance provider can have its own benefits.

Here, we analyse the pros and cons of staying loyal to your insurance company.

Merits Of Car Insurance Loyalty:

Motor insurance companies offer a host of benefits to the customer to make his/her stay worthwhile. The perks offered vary from one insurer to another; however, the benefits offered for extended loyalty are the noteworthy ones. The bundling discounts offered by insurers on multiple insurance products are also variants of the loyalty benefits. Some of the common benefits offered by car insurance companies for customer loyalty are described below:

  1. Lower premium rates - Car insurance companies offer lower rates of premium for customers who have been insured with them for an extended duration. This is one of the most attractive benefits of customer loyalty as far as insurance is concerned.
  2. No Claim Bonus (NCB) - This is a benefit offered by an insurance provider to a car owner who has stayed insured with the company for at least 1 year. The car owner should have also refrained from raising any claims during this time. The percentage of NCB offered increases with the number of claim-free years. The NCB can be utilised at the time of car insurance renewal to get a definitive premium discount.
  3. Other benefits - Although accident forgiveness is a concept that is seen in several countries outside India, variants of this trend is catching up in the Indian insurance space as well. Car insurance companies may not hike the premium following a small own-damage claim, provided the person raising the claim is a long-standing customer. Some car insurance providers may offer to foot the bill for the entire claim amount in the case of minor repairs. Effectively, the car owner will not be required to pay the deductibles.

Demerits Of Car Insurance Loyalty:

It is often found that inertia is a very powerful thing - people feel that it is easier to stay with the same insurance provider than get into the hassles of switching companies. This, coupled with the fact that almost all car insurance companies today have relatively high customer satisfaction figures, makes the switch seem like an unnecessary activity. However, you should know that there are several disadvantages of car insurance loyalty in India:

  1. Insufficient coverage - When you are renewing your car insurance policy with the same insurance company, you should read through the terms and conditions in the new policy carefully. This will ensure that you receive adequate coverage under the new plan. You should keep in mind that your insurance company may alter the coverage under the plan at the time of renewal. So, it is crucial to go through the extent of coverage without assuming that the terms and conditions are the same.
  2. Better prices - In spite of the loyalty discounts you are receiving from your current insurance company, you may find that there is another leading insurer in the market offering you similar coverage at a lower cost. You should study the customer care services, claim settlement history, and reliability of the company before considering a switch.

Points To Remember:

Before switching car insurance companies, keep the following in mind:

  1. Penalties/termination fees - Some insurance providers can charge penalties when a customer cancels his/her insurance coverage before the renewal date of the policy. In case your current car insurance provider charges termination fees, you should ensure that this loss is offset by the savings you gain from switching.
  2. Loss of loyalty discounts - Customers could lose the premium discounts they receive on the basis of loyalty. You should take these discounts into consideration when you are looking to switch car insurance providers.

So Is It Worthwhile To Change Insurers?

The question of whether you should change insurers is based on your individual situation. It is advisable to shop around and get quotes from various insurance providers. There is no obligation for obtaining quotes as this can be done free of cost through neutral financial websites in a matter of minutes. However, when comparing policies, you should take into account the cost of switching and the discounts you will be giving up while implementing the switch.

It is worthwhile to make a switch under the following conditions:

  • The customer service offered by the current insurance company is not up to standards.
  • The turnaround time for claim settlement is not agreeable.
  • The same coverage is extended by an alternate insurance company in the market at a lower cost.
  • Other insurance companies have a vast network of cashless garages and offer attractive add-on covers under motor insurance.
  • There are no significant bundling or loyalty discounts you are enjoying through your association with the current insurance company.

No doubt that lower car insurance premiums and extra discounts are tempting. But these features may not be worth the effort of leaving your current insurance company. You have to do a complete financial assessment and inform your current insurance company in advance, in case you are planning to switch. Informing the insurer at least 30 days in advance can help in ensuring that you get the NCB retention certificate and complete all necessary formalities on time. The insurance company may also offer you a better deal on your insurance, in an attempt to win back your business. This could end up saving you some money; so plan ahead.

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Car Insurance Reviews

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  • National Insurance Car Insurance
    "GOOD"
    0.5 4.5/5 "Excellent!"
    I had no claim experience with NATIONAL INSURANCE and using from last more than 8-9 years. The premium paying was nominal than others when compared also the IDV value was nominal. The policy coverage is for bumper to bumper and also they are no claim, road side assistance is there.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jun 17, 2019
  • Iffco Tokio
    Iffco Tokio Car Insurance
    "GOOD"
    0.5 5.0/5 "Blown Away!"
    I am using the car insurance policy with IFFCO TOKIO GENERAL INSURANCE and using from last 2013 and i no claim experience also coverage is for bumper to bumper for full coverage. The premium and the IDV value is good compared to the others. There are benefits of road assistance is not there.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 16, 2019
  • review Car Insurance
    "Nice price"
    0.5 4.0/5 "Great!"
    They have provided me a good IDV value for the less premium amount. The Policybazaar people has taken the initiative they have assisting the policy while i purchasing the policy. I have paid the premium amount of Rs. 4500 for the IDV value of Rs. 3.5 lakhs. Its a comprehensive policy. They are provided me a no claim bonus and i do not have any claim experience till now.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 14, 2019
  • United India Car Insurance
    "Recommendable policy"
    0.5 3.0/5 "Satisfactory"
    Since my friend is working in United India hence i have chosen the car insurance policy from them. Since the car is 5 years old, they won't provide the zero depreciation policy and its a third party policy. I have paid the premium amount of Rs. 1800 and the premium is very less and the coverage amount is less than lakhs. I have got my no claim bonus and i don't have any claim experience with them. They have sent the hard copy of the documents to the customer's address without any request.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jun 14, 2019
  • ICICI Lombard Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I had a claim experience with the card insurance policy holding with the ICICI LOMBARD GENERAL INSURANCE where the claim i got was 100%, the customer support is good. The premium paying through online it was higher. IDV value is good. Coverage is for zero dep. There was road side assistance is available.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jun 13, 2019
  • review Car Insurance
    "Value for money"
    0.5 5.0/5 "Blown Away!"
    I took my car insurance through an online channel from Kotak General. I chose this insurance company because of the premium is cheaper than others. I paid the premium around Rs. 17,000 for one year. I have a comprehensive plan as it covers my entire car parts and also it has a accidental cover. But the support team need improvement, however I got the IDV value around 8 lakhs for honda citi car.
    Was this review helpful? 0
    , kolkata
    Reviewed on Jun 13, 2019
  • National Insurance Car Insurance
    "Value for money"
    0.5 5.0/5 "Blown Away!"
    I availed car insurance with National Insurance company for that I paid the premium around Rs. 8000 for one year. I took comprehensive plan which cover for me and the vehicle. They do have road side assistance, 24 hours service. Whenever I go for the renewal they are providing no claim features its good.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 12, 2019
  • ICICI Lombard Car Insurance
    "Reliable policy"
    0.5 5.0/5 "Blown Away!"
    I had a claim experience twice with ICICI lombard which is good and its a 100% cashless claim. They have processed the claim immediately. In my policy, i got a no claim bonus, road side assistance and its zero depreciation policy. I have been paying the premium amount of Rs. 15000 and the policy got expired last month and they have sent me a reminder alert and calls.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jun 11, 2019
  • HDFC Ergo Car Insurance
    "Good claim experience"
    0.5 4.0/5 "Great!"
    I faced a claim with HDFC ERGO, when my car glass got damaged I got the cashless garages within 18 days they have rectified the issue. I paid the premium of Rs. 11,900 for one year. I availed zero dep its covers all plastic, glass material. Even the insurance company got tied up with garages.
    Was this review helpful? 0
    , ahmedabad
    Reviewed on Jun 11, 2019
  • ICICI Lombard Car Insurance
    "Good Policy"
    0.5 3.5/5 "Pretty good"
    ICICI is the one of the top banker and the policy has tie up with ICICI hence i have chosen my car insurance policy with them. I pay the premium amount of Rs. 30000 and its not a 100% covered policy. I had a claim experience with them and it was not a cashless and I'm not satisfied with it. Compared to others, there are so many restrictions. They have a charged slip and they will verify everything then only they will return the money and the process also got delayed.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 11, 2019
  • ICICI Lombard Car Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I have paid Rs.6800 for one year car policy with ICICI Lombard. I have Santro car which is 12 years old. It is a comprehensive third party insurance. The renewal process was very simple and never had any challenges. I am doing online renewal and the insurance paper sent on time. Out of 12 years claimed 3 times, the process was very smooth and easy. The garages are more for cashless.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jun 11, 2019
  • Oriental Insurance Car Insurance
    "Good Policy to use"
    0.5 3.0/5 "Satisfactory"
    I am paying the premium amount of Rs. 18000 for my car insurance policy which i taken from Oriental. I get a coverage amount of Rs. 3.50 lakhs and they are providing a cashless claim and till not applied for any claim. They have provided me a bumper to bumper and road side assistance and its not a zero depreciation policy.
    Was this review helpful? 0
    , ahmedabad
    Reviewed on Jun 11, 2019
  • Reliance General Car Insurance
    "Very Good Policy"
    0.5 4.5/5 "Excellent!"
    Actually its a company lease car, hence with their interest, they have provided me a policy with Reliance. This is a first party and third party covered policy. Since the company is paying the premium, I'm not sure about the premium amount and coverage amount. I do not have any claim experience
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 09, 2019
  • ICICI Lombard Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I had no claim experience with the ICICI LOMBARD GENERAL INSURANCE where i have been using the policy since from lat few years. The premium paid was nominal also the policy coverage is for bumper to bumper. There is a no claim bonus also the road side assistance is with this policy.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 08, 2019
  • HDFC Ergo Car Insurance
    "Good claim experience"
    0.5 4.0/5 "Great!"
    I claimed with HDFC Ergo because there was some scratches on my swift dezire car, due the parking area. On that time I just paid Rs. 1000 registration fee remaining amount around Rs. 28,000 was claimed from my car policy . However I paid the premium of Rs.9000 for zero depreciation plan.
    Was this review helpful? 1
    , delhi
    Reviewed on Jun 08, 2019
  • National Insurance Car Insurance
    "Good for money"
    0.5 5.0/5 "Blown Away!"
    I have Santro car it was manufactured in 2015, I took comprehensive plan its fully covered. I believe last time I paid Rs. 5500 of premium, however is no claim but they have road side assistance, 24 hours service with other benefits like no claim feature.
    Was this review helpful? 1
    , kochi
    Reviewed on Jun 06, 2019
  • Bajaj Allianz Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I have purchased the car insurance policy with the BAJAJ ALLIANZ GENERAL INSURANCE and using it since from last one year. I had no claim experience with this policy and also policy coverage with this policy is for basic with this policy.
    Was this review helpful? 1
    , bhubaneshwar
    Reviewed on Jun 03, 2019
  • review Car Insurance
    "Policy is very good"
    0.5 5.0/5 "Blown Away!"
    Bought my car insurance from Kotak Mahindra Insurance. Not any particular reason for choosing the company. I have a claim experience. The given IDV value is Rs. 4.60 lakhs and i am satisfied with it. I have paid the premium amount of Rs. 12000. They are providing a no claim bonus, road side assistance and its a zero depreciation.
    Was this review helpful? 1
    , noida
    Reviewed on Jun 03, 2019
  • ICICI Lombard Car Insurance
    "GOOD"
    0.5 5.0/5 "Blown Away!"
    I have been using the car insurance policy with the ICICI LOMBARD GENERAL INSURANCE where i have been using it since from last 1-2 years and i had no claim experience with this policy. The premium paid was nominal also the IDV value is good with this policy. There is a no claim bonus coverage also the bumper to bumper coverage is applicable.
    Was this review helpful? 1
    , chennai
    Reviewed on May 31, 2019
  • ICICI Lombard Car Insurance
    "Smart Protection"
    0.5 4.0/5 "Great!"
    I insured my car with ICICI Lombard I paid the cost of Rs. 14,000 it has the term of two years. I have zero depreciation cover, I got my policy paper on time. The insurer quoted the value of 80% from the total value. I have swift dezire car it was 2017 model.
    Was this review helpful? 0
    , hyderabad
    Reviewed on May 31, 2019
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