Five things to check before you renew your motor insurance

Motor insurance is the policy most Indians hold and the one they read least. The renewal usually arrives as a link a week before expiry, and the fastest thing to do is pay it. That's understandable. But five quick checks, none of which take more than a couple of minutes, can make the difference between a claim that pays and a claim that disappoints.

1. Is the Insured Declared Value (IDV) right?

IDV is the maximum the insurer pays if your vehicle is stolen or written off. It's typically the manufacturer's listed price less depreciation on a standard schedule, but insurers allow some adjustment within a band. Set it too low and a total-loss claim falls well short of what a replacement costs. Set it too high and you pay a higher premium every year for value you'd never receive. Look at what similar vehicles of the same age sell for, and check that the IDV on your renewal notice is in the same neighbourhood.

2. Is your no-claim bonus intact?

The no-claim bonus (NCB) is a discount on the own-damage premium for each claim-free year, rising in steps to a maximum of 50%. It belongs to you, not the vehicle, and carries across insurers if you switch. Two things put it at risk: making a small claim that would have been cheaper to pay out of pocket, and letting the policy lapse beyond the grace window the insurer allows. Check the NCB percentage on the renewal notice against last year's, and if you've had a small dent this year, do the arithmetic before you claim.

3. Which add-ons are you actually using?

Zero depreciation, engine protection, return-to-invoice, roadside assistance, consumables cover: add-ons are where a motor premium quietly grows. Some are clearly worth it: zero depreciation on a newer car can turn a partial claim from painful to painless. Others are renewed out of habit on a vehicle that's aged out of needing them. Look at the add-on list, look at your car's age and how you use it, and decide each one deliberately.

4. Is the compulsory personal accident cover in place, and is it duplicated?

Every owner-driver policy includes a compulsory personal accident cover with a sum insured set by regulation. Check that it's there. Then check whether you already hold a standalone personal accident policy through your employer or your bank; if so, you may be able to opt out of the motor-linked cover, provided you hold equivalent cover elsewhere. Either way, know what you have.

5. Read the exclusions once

Driving without a valid licence, driving under the influence, using a private vehicle commercially, and consequential losses like engine damage from driving through water: the exclusions in a motor policy are short and worth reading exactly once. If any of them describe how the vehicle is actually used, that's a conversation to have before renewal, not after a claim.

A note on third-party cover

Third-party liability insurance is mandatory under the Motor Vehicles Act, 1988, and its premium is set by IRDAI rather than by the insurer. What you're actually choosing at renewal is the own-damage portion: whether to hold it, how much to declare, and what to add. That's where the five checks above apply.

None of this requires switching insurers. Most renewals, after these checks, go ahead with the same policy and perhaps one adjustment. The point is that it becomes a decision rather than a reflex.

Sources: Motor Vehicles Act, 1988 (mandatory third-party cover); IRDAI motor third-party premium notifications; India Motor Tariff depreciation schedule for IDV.