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Car Insurance Loyalty - Merits and Demerits

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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.

Car Insurance Reviews

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  • HDFC Ergo Car Insurance
    "Very good"
    0.5 5.0/5 "Blown Away!"
    Even my car was insured with HDFC Ergo. It is a second-end car and have chosen the third party insurance. I have not done any claim so far. The premium is reasonable. It offers bumper to bumper facility and road side assistance. The policy period is 2 years.
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    , bangalore
    Reviewed on Jan 14, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
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    , tirupur
    Reviewed on Jan 10, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
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    , mumbai
    Reviewed on Jan 10, 2019
  • National Insurance Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this Insurance policy for my Maruti Car and i had been paying the premium on an annual basis. The premium amount has not been too high and there has been cash less garages available with this insurance policy. Their customer support has also been helpful at times.
    Was this review helpful? 1
    , pune
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  • ICICI Lombard Car Insurance
    "Nice Policy"
    0.5 4.0/5 "Great!"
    My car was insured with ICICI Lombard. Last year i have purchased this insurance policy. My wife has referred me about this policy. I pay the premium amount of Rs. 13500. They have given me a convenient IDV value. I had no claim experience so far.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Need to improve the service"
    0.5 3.0/5 "Satisfactory"
    I'm not satisfied with the service provided by new India. I have bought the car insurance policy. They closed their branch on every weekends hence its difficult to renew the policy. I have been paying the premium amount of Rs. 14000 which is a competitive price. They have given the IDV value of Rs. 1.50 lakhs.
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Average Car Insurance"
    0.5 3.0/5 "Satisfactory"
    My car insured with the New India Insurance company. I have been renewing the policy with the same company for 3 years. I have paid the premium amount of Rs. 7000 and they have offered me a satisfied coverage value. The documentation process was fine
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • review Car Insurance
    "Its Good"
    0.5 3.5/5 "Pretty good"
    Last year I had car policy with Bharthi axa whenever I try to renew it ask my poliy no, whenever I mention the same, it shows the its incorrect. If I try to reach the customer care its not reachable. I done the claim, some minor damage back side of the car, they have processing fee 1500. Remaining all taken care by the insurer.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Great Policy"
    0.5 4.0/5 "Great!"
    ICICI Lombard has a good brand value hence i have selected the car insurance policy with this card and the dealer has also recommended about this policy. I pay the premium amount of Rs. 9000 and this is a 100% coverage with bumper to bumper facility. I'm not sure about the IDV value. Its easy to renew the policy.
    Was this review helpful? 2
    , new delhi
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Good"
    0.5 5.0/5 "Blown Away!"
    Previously my car was insured was with ICICI Lombard and it was offered by the showroom. I got a call from the representative for the policy renewal as reminder. I got the insurance paper. I have not done done a claim. It is a comprehensive with zero dep. The premium was high so changed my insurer.
    Was this review helpful? 1
    , mumbai
    Reviewed on Jan 08, 2019
  • Future Generali Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    I have taken a car insurance from Future Generali through online portal. The premium was reasonable and also they have provide bumper to bumper facility. The policy period is one year. There is no interaction between the customer service. I just gave my car for the claim so no experience.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 08, 2019
  • Oriental Insurance Car Insurance
    "Good insurance company"
    0.5 2.0/5 "Expected more"
    Dealer has referred me about this oriental car insurance when i purchase the vehicle. They have rejected the claim since the copy of FIT is not available. They have given me a coverage value upto Rs. 6 lakhs. For the past 3 years i have been renewed the policy with the same company.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Iffco Tokio Car Insurance
    "Good Policy and you can try"
    0.5 4.0/5 "Great!"
    Two months before, i have taken my car insurance policy with Iffco Tokio. Its a PAN India agreement policy for my Maruti Car. I don't remember about the coverage value. This is a zero depreciation policy. I paid the premium amount of Rs. 6500. I have not seen any add on and cashless garage facility.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Its Excellent"
    0.5 4.0/5 "Great!"
    My brother is working with Reliance hence I took my two wheeler policy from this insurance company. I have hyundai accent car, they are providing cash less garages for the damage. I have zero depreciation bumper to bumper policy for the term of one year.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance policy was taken with reliance. The dealer has provided me a policy with this policy. This is a 100% coverage value which covers the bumper to bumper facility, They have given me a IDV value of Rs. 11 lakhs. I pay the premium amount of RS. 33000.
    Was this review helpful? 0
    , thane
    Reviewed on Jan 04, 2019
  • HDFC Ergo Car Insurance
    "Good service provider"
    0.5 4.5/5 "Excellent!"
    The reason to avail HDFC Ergo policy, my banker have suggest this insurer for my car. They gave me the best insured value around Rs. 6 lakhs based on the vehicle age. I have Hyundai I20 car, they are providing 24/7 helpline and cashless service.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 04, 2019
  • ICICI Lombard Car Insurance
    "Good Policy to take"
    0.5 3.0/5 "Satisfactory"
    My car was insured with ICICI Lombard. I pay the premium amount of Rs. 22000 and i have been renewing the policy continuously for 2 years. They have provided me a no claim bonus. Its covered with bumper to bumper facility. My dealer has recommended me about this policy when i purchase a car.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 03, 2019
  • Iffco Tokio Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I have a car insurance with IFFCO TOKYO from last 1 year, there was no claim experience so far with this insurance policy. I pay a premium of Rs 5500 for this car insurance. This is a first party insurance with 0% depreciation and the coverage value is good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 03, 2019
  • Bajaj Allianz Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I have a car insurance policy with Bajaj allianz from last 2 years, a premium of Rs 13000 has to be paid for this insurance policy. There was no claim experience so far with this car insurance. This policy has full coverage with 0% depreciation.
    Was this review helpful? 0
    , secunderabad
    Reviewed on Jan 03, 2019
  • Tata AIG Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I am having a car insurance with TATA AIG from last 1 year, a premium of Rs 7272 has to be paid for this car insurance policy. I did not claim anything so far from this insurance policy. I am happy with the plan benefits and policy coverage of this insurance.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jan 03, 2019
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