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Switching Car Insurance Company - The Pros And Cons

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Car insurance is a mandatory annual expense if you drive a vehicle in India. Based on your area of residence, the rates could be high or low. At the time of policy purchase, even though you may come across insurance agents who are willing to help you bag the best deal on premium, it is always wise to do your fair share of research before deciding on a policy.

When renewing car insurance, it is often seen that customers tend to continue on the existing policy for the sake of convenience. However, it is crucial that you explore the options available to you before doing so. You may be able to get a policy with a better coverage in a more cost-effective manner; so do not miss out on that opportunity!

This article helps you understand how you can benefit from a switch and how to go about doing that.

Why Should You Switch Insurance Companies?

The answer to this question is dependent on the experience you have had with your current insurer. Other reasons for a switch include:

  • You just shifted your place of residence
  • Your insurance company increased the premium
  • The customer care service of your car insurance company is below par
  • You will soon be adding a new driver under your insurance

You should never underestimate the potential difference in cost between the plans offered by two insurance companies in the same city. You will never know if you can get a better deal unless you shop around.

How To Change Insurance Companies:

Industry experts are of the opinion that you should look to change your insurance company every three years. Listed below are the primary steps involved in accomplishing a successful switch:

  1. Compare policies - This would be your first step in the pursuit of an ideal insurance plan. Several neutral financial websites allow you to compare car insurance plans between multiple insurers in the market, free of cost. Make use of this facility to gain big!
  2. Investigate the insurance company - Before you decide on a policy you should read about the insurer and get an idea of their claim settlement statistics. You can also read about the customer service the insurer provides. So, do not sign up with an insurance company just because it offers you a cheaper policy. You should pick an insurer with a good reputation and performance in the industry.
  3. Get maximum coverage - Buying the minimal level of insurance will help you to stay on the safe side of the law. However, it may not protect you adequately after an accident. So, buy the maximum coverage that you can afford.
  4. Cancel your current policy - When you have decided to switch insurers, make sure that you inform your current insurance provider through a written notification. This makes sure that your current insurer doesn’t continue to bill you for the insurance coverage.

Such an incident may reflect poorly in your credit report. So, ensuring that the old plan is cancelled is a sure-shot way to avoid such complications.

  1. Be honest - When applying for a new insurance policy, you should furnish details about your driving history in an honest manner. If you withhold important information or provide inaccurate details, your insurer is likely to find out. This may lead to higher premiums on insurance or the denial of a claim.
  2. Drive safely - When a new policy is less than 3 months old, it is advisable to not raise any claims. Your new insurer may even drop you for the same. So, be careful and drive safe in the first few months of your new insurance coverage.

When Should You Inform Your Current Insurer?

When you have decided to switch insurance companies, you should inform your current insurer at the earliest. A 30-day notice prior to cancellation will work well.

An advantage of informing your insurer of the switch early is that it will provide them enough time to win back your business. If you have been a diligent driver with a great driving record, your current insurer may offer you a better deal on car insurance renewal premium. You may not have known about your qualification for some of the discounts the company offers you at this point of time. If your current insurer is able to match the best available deal, you can reconsider your decision of a switch.

Are There Cancellation Charges?

It does not cost much, or even anything, to change insurance companies:

  • At the time of policy renewal, you will not be required to pay anything for a switch.
  • If you are cancelling mid-term, your insurer is likely to reimburse the premium you paid on a pro-rata basis.

All that you need to be careful about is the gap in coverage. You certainly do not want to cancel your existing policy and have a gap before the coverage under the new policy starts. Driving your car with a break in insurance will attract heavy penalties. If the duration of the break in insurance is high, the new insurance company may even charge you a higher premium at the time you get around to buying a policy.

Downsides Of Changing Insurers:

Some of the disadvantages of shifting insurers are as described below:

  • Some insurance companies offer loyalty discounts that you will miss out on when you switch.
  • In case you have other insurance policies with your current insurer you may lose out on bundling discounts.
  • You may take a while to form a trusted relationship with your new insurance provider.

Hence, you should weigh out the pros and cons of shiting insurers and make a judicious decision.

In conclusion, with the availability of multiple car insurance products in the market, staying loyal to just one may not be the best option. Premiums fluctuate year on year; so the most optimum car insurance you are eligible for will also vary. As long as you maintain a healthy driving history, provide sufficient notice to your insurer, and avoid break in insurance, you are likely to enjoy better premiums through a car insurance switch.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

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.
    Was this review helpful? 0
    , 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.
    Was this review helpful? 1
    , 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.
    Was this review helpful? 0
    , 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
    Reviewed on Jan 09, 2019
  • 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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