What comes as an important fact is that there is ‘N’ number of insurance companies that might charge a higher premium when it comes to renewing a motor policy. Well, you always have the option to stroll over to a new insurance provider at the time of the policy renewal. Now, as an insurance agent, your job is to compare the policies by not just keeping premium rates in mind, but also stress upon claim settlement ratio, customer relationship, the financial health of the company as well as add-ons.
When your client’s policy is near the completion of the term, it’s the right time to consider whether a new policy might come handy or the old one is fine. After assessing and judging the client’s requirement you can either change the insurer or strengthen the old one with add-ons like Zero Depreciation, No Claim Bonus, Roadside Assistance and more. One can also consider including electrical or non-electrical accessories amidst the coverage. In this article, we will be talking about what are the aspects that you must cater while renewing your client’s motor insurance policy?
IDV at the time of renewal:
As we all know IDV is the sum insured in the motor policy. When you purchase a motor vehicle, the IDV is determined on the basis of the selling price of a particular brand and model. As soon as you take the motor vehicle outside the showroom, the value starts decreasing. It can drop down to 5% in a matter of just 6 months. When it comes to a policy renewal, the premium is calculated in lieu of the depreciated value of the motor vehicle. Now, here’s the catch, your client always has the liberty to vary the IDV. In simpler terms, a car owner can make changes in the IDV at the time of policy renewal by implementing the depreciation rate based on the table. You can make changes as high as plus or minus 15% in the IDV. Let’s say that the by default IDV rests at Rs. 3 lakhs INR, through the above-mentioned change process, you can now pick an IDV in the range of Rs. 2.55 lakhs INR & Rs. 3.45 lakhs INR. You can inform your client about this, always remember that higher IDV means a higher premium.
Types of Add-ons offered:
At the time of renewing a motor policy, an agent must make it his/her priority to provide satisfaction to the client and added security to the vehicle. One can always consider looking for add-ons such as 24×7 spot assistance, accident shield, personal baggage, consumable expenses as well as a lock & key replacement cover. Also, one should know that drivers which are considered to be of lower risk or the ones who have installed anti-theft devices are liable for discounts on some insurances. Thus, if your client’s vehicle has safety equipment installed you can help them reduce the premium cost during renewal. Drivers which are old, married or have successfully maintained a safe driving record are eligible when it comes to taking advantage of the discounts.
Zero Depreciation Cover:
Zero Depreciation Cover is more like a must-have amenity when it comes to car insurance policies. If your client has a higher-end motor vehicle, the depreciation amount is more likely to be much higher. With the help of a Nil depreciation cover, a user can keep out the depreciation factor well out from the coverage. You can consider shifting to a zero depreciation cover in case you have a luxury car or your car has expensive spare parts.
Making Use of Accumulated NCB:
Do you know that your client is eligible to enjoy a discount for being a good rider? Well, No claim bonus or NCB is the one driving the motion here. If your client hasn’t filed any claim of the motor in a fiscal year, he/she can get their hands on lucrative discounts. For every claim-free renewal, NCB can hike up to 50%. Also, renewing the insurance on time is crucial. If you renew your policy well before the time, you can obtain as high as 35% of NCB.
Read more about how to lower motor insurance premium
Read more about change of premium rates for motor third party liability cover