The 5 Biggest Mistakes People Make When Switching Car Insurance Providers
Highlights
● Switching car insurance can save money, but small mistakes can cost you more later.
● Many people focus only on the price and ignore coverage gaps and claim terms.
● Timing your switch matters more than most drivers realise.
● A careful comparison helps you avoid rejected claims and lost benefits.
Switching car insurance providers sounds simple. You compare prices, pick a cheaper plan, and move on. But in real life, many car owners in India make costly mistakes while switching car insurance providers. These mistakes often show up when you need to make a claim. And by then, it is too late to fix them.
If you are planning to switch your car insurance, you should know where others go wrong. This guide walks you through the five biggest mistakes and shows you how to avoid them.
Mistake 1: Choosing the Cheapest Policy Without Checking Coverage
This is the most common mistake. You see a lower premium and feel you have won. But cheaper is not always better. Basically, many cheap policies may not offer enough protection. They may have:
● Lower IDV
● Less add-ons
● More deductibles
● Lower claim support
While you may save ₹1-2,000 on purchasing the policy, you have the risk of losing several thousands later.
What you should do
Before you switch car insurance providers, compare the following points:
● IDV: Is it similar to your car’s market value?
● Third-party liability limits: Are they standard and compliant?
● Own-damage cover: Does it include floods, theft, and fire?
● Add-ons: Zero depreciation, engine protect, roadside assistance
While a policy might have a slightly higher premium, chances are it would give more peace of mind.
Mistake 2: Ignoring the Claim Settlement Record of the Insurer
Many people forget to check an insurer’s claim settlement ratio. This can turn out to be disastrous.
You may ask, “Does claim settlement really differ so much?” Yes, it does. Some insurers settle claims faster and with fewer questions. However, others might take ages and ask for too many documents.
What you should do
Ensure you always check:
● Claim Settlement Ratio from IRDAI reports
● Online reviews by customers
● Garages near you that are in the insurer’s network
Mistake 3: Losing Your No-Claim Bonus During the Switch
Your No Claim Bonus is important. It can reduce your premium by up to 50 per cent over time. Many car owners lose this benefit while switching car insurance providers. This happens due to:
● Declaring NCB incorrectly
● Not providing the correct details of the previous policy
● Renewal after the grace period
If lost, it’s almost impossible to recover NCB.
How to protect your NCB
The steps given below can help you save your NCB:
● Preserve a copy of your earlier policy
● Correct declaration of NCB
● Change the insurer before your ongoing policy expires
● Use the official NCB transfer option during purchase
NCB belongs to you, not the insurer. Protect it carefully.
Mistake 4: Switching at the Wrong Time
Timing is critical when switching car insurance providers. Many people switch too late or too early without understanding the impact.
If your policy lapses:
● Your car becomes uninsured
● You lose NCB
● You may need a vehicle inspection again
● Claims during the gap are not covered
On the other hand, switching too early may lead to confusion and overlapping covers.
Best time to switch
The ideal window is 15 to 30 days before policy expiry.
This gives you time to compare, ask questions, and complete paperwork calmly. A smooth switch keeps your coverage continuous and stress-free.
Mistake 5: Not Reading Policy Terms and Add-on Conditions
Most people skip the fine print. This is risky. Every car insurance policy has exclusions. Some add-ons have terms and conditions that can leave you in a bad spot.
For example:
● The engine protection cover might not include water damage from driving through flooded roads.
● Zero depreciation may have limited claims.
● Roadside assistance may have limitations related to location and time.
How to avoid such surprises
When opting for your next policy, ensure you:
● Read the policy completely and carefully
● Check exclusions in add-ons
● Note the deductibles and limits
Understanding the policy you’re buying can help you save yourself from nasty surprises later.
Bonus Tip: Don’t Hide Past Claims or Modifications
Some people hide past claims to get lower premiums. Others forget to declare CNG kits or alloy wheels. This is a serious mistake. If discovered, your claim can be rejected fully.
Always declare:
● Past claims
● Car modifications
● Usage type (private or commercial)
Honesty keeps your cover valid.
The Right Way to Switch Car Insurance Providers
Here is a simple checklist to follow:
● Compare coverage, not just price
● Check insurer's reputation and garages
● Transfer your NCB correctly
● Switch before policy expiry
● Read terms and add-on limits
Switching car insurance providers should make your life easier, not harder.
Final Takeaway: Save Smart, Not Blind
Switching car insurance providers can save money and improve coverage. But only if you do it right. Avoid rushing. Avoid shortcuts. A well-chosen policy protects your car, your wallet, and your peace of mind.
Spend a little time today so you do not spend a lot tomorrow.
FAQs
1. Is it safe to switch car insurance providers every year?
Yes, it is safe if you maintain continuous coverage and transfer your NCB correctly. Many drivers switch yearly to get better deals.
2. Will switching car insurance affect my claim history?
No, your claim history stays with you. But you must declare past claims honestly while switching.
3. Can I switch car insurance providers after my policy expires?
You can, but it is risky. You may lose NCB and face a vehicle inspection. Always switch before expiry.
4. Do I need a new inspection when switching insurers?
Usually, no, if you switch before expiry. Inspection is common if the policy has lapsed.
5. What is the most important thing to check before switching car insurance?
Check coverage details and claim settlement quality. Price should come second.