While motor insurance is a mandatory requirement by law for anyone who owns a vehicle, this doesn’t mean that one always needs to follow a standard approach to their policy. Every once in a while, you might feel that your driving habits or pattern has changed and your current policy needs to undergo a change. This is where portability in motor insurance steps in. Every vehicle policy is valid for one year. Even after doing proper research and getting familiar with the policy and the benefits, it is quite possible that with evolving insurance market offering new-age products, you might want to refresh your motor insurance for your changing needs as well.
If you are looking to port your motor insurance policy and know about the benefits or risks involved, here’s all that you need to know –
Why opt for portability?
Motor insurance portability comes into play if the policyholder is not satisfied with the policy and its benefits. A few reasons could be as if the policyholder is getting wider coverage at an affordable price, so he or she might choose the portability option. Otherwise, if the insurer or agent has mis-sold the motor policy, if the claim settlement procedure of the current insurer is cumbersome, if the driving usage has changed, etc., or if there are no network garages nearby, in any of these instances, one can opt for portability to find a better insurer.
Benefits of porting
– The No Claim Bonus (NCB) remains intact: For every claim-free year, the insurance company offers a reward called the NCB. This NCB can be up to 50% of the OD premium, which is a generous amount.
People hold the common notion that their existing policy does not provide them with the NCB benefit transferred to the new motor insurance policy. This isn’t true as whenever a policyholder ports the motor insurance, it allows him/her to retain this bonus.
One can only lose this NCB if their insurance policy is not renewed on time or in case they had made a claim during the policy tenure.
– No vehicle inspection needed: A car inspection is only necessary for the insurer to gauge the condition of the vehicle in case the previous policy has expired or ownership of the car has changed. Otherwise, while switching to a new insurer, vehicle inspection is not mandatory.
What is the best time to port motor insurance?
There is no restriction on the timing of porting your car insurance policy, but it is advised to make the switch within 45 days before your existing policy expires. Doing this would ensure the policyholder to avail of the benefits like the no-claim bonus, no vehicle inspection, etc. from the existing policy. After providing the details about your old insurance policy, the portability can be processed without much of your involvement.
Few things to remember while Porting
1. Check the IDV: Before deciding to port your policy, you must check the car’s current market value, also known as the insured declared value, of your car. IDV can change the premium of the current policy, but ensure to select an appropriate IDV to get the proper car value in case of theft or total loss.
2. Avoid mid-tenure policy portability: If you are looking to switch your insurer mid-tenure, you might lose benefits like NCB and no vehicle inspection, and there is a possibility that the previous insurer may not return the complete refund. Starting the portability process 45 days prior to policy expiration would reap more benefits.
3. Documents Required: There are a few documents that you must keep handy at the time of porting your policy. The new insurer may need documents like a Pan Card, an Aadhar Card, a copy of your registration, copy of your previous policy, etc. The new insurer will also ask about your claim history to calculate the NCB.
Lastly, settling for a motor insurance policy only on the basis of lower premium rates isn’t a good idea. One must evaluate all the policy details and clauses carefully to make an informed choice after comparing all the available options online.
– The author is head – motor insurance, Policybazaar.com. Views expressed are personal.
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