Tech-based insurance companies have seen an unprecedented growth, especially in the aftermath of the pandemic, because consumers have warmed up to looking for all their needs online. Sure enough, the offerings from both traditional and tech-based insurance companies have also evolved significantly as they look to serve the dynamic needs of the customers.
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This has placed the customer in a brilliant position with a lot of choices when it comes to car insurance. They can now switch between providers at any time, over any eventuality. However, in case of accidents, the story may look a little different. If you are looking to switch your service provider after an accident, here are some basics you need to understand first.
Your ‘no-claim’ status has a role to play
If you switch your insurance provider after your car has been involved with an accident, there is a chance that the company will raise their premiums. However, let's look at how a claim affects your insurance price during renewal. You receive a no-claim bonus (NCB) discount if you have not filed a claim throughout the course of the policy period. If you go a year without filing a claim, this discount benefit starts at 20 percent of your own damage premium. If you have five straight years without a claim, the cumulative amount increases to 50 percent. If you file a claim, your no-claim bonus will be reset to zero and your insurance rate will go up.
Switching insurers won't really help in this situation as you'll have to notify your new insurer about your existing no-claims bonus status and pay the appropriate rate. Declaring incorrect claim history or incorrect no-claim bonus may result in claim denial. Therefore, switching providers after a claim is not particularly beneficial.
Consider the circumstances
It is best to consider all your alternatives while renewing, especially if you have already filed a claim. The ideal solution takes into account factors like premium, claim servicing, and client reviews. At the time of filing a claim, you must have known the coverage amount for the base goods and the advantages of various add-ons. Therefore, it would be beneficial if you compare various add-ons and covers according to your driving requirements.
Every year, your requirements and circumstances change. You may have moved to a more accident-prone city or started carpooling with family members. All these changes demand different policy coverages and thus, it’s better to evaluate which company and product suits your need, and switch accordingly.
Since Covid, offices have opened and traffic on the roads has risen. Therefore, analyzing your present policy is important so that you can change to one that is more appropriate.
Check the claim settlement ratios
There are several justifications for changing insurance providers. If you had a negative claim experience with a firm, you should change companies. Customers should have a streamlined claim experience from insurers, but this rarely happens because of the burdensome paperwork and unnecessary questions that customers deal with when filing claims. You should pick a business with a smooth claim settlement process.
Fortunately, if you haven't dealt with an insurer's claim process, you can read web reviews of the insurer. A selection concerning the insurance provider might be aided by the numerous client reviews that are shared online. You should avoid a company if you notice that it consistently receives poor reviews.
Say ‘no’ to middlemen
High premiums brought on by built-in agent commissions are another factor that should prompt a firm change. It is best to go straight to the insurer's website to get an insurance policy since in the event of your renewal, insurers wind up paying commission to the agent, which also raises your premium.
Few insurance firms do not offer certain coverages and add-ons for an aged vehicle. For instance, most the companies offer zero-depreciation (bumper to bumper cover) till the car is 5 years old. If you use your car very often, then you should buy Zero-depreciation and switch to the insurer who is offering it to you. The same logic is applicable to other add-ons also like engine protect, invoice cover, etc., which is usually offered for the first 3 years of the car ownership.
The author, Animesh Das, is Senior Director at Motor Underwriting, ACKO
First Published: Oct 6, 2022 4:11 PM IST
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