A motor vehicle insurance policy is usually valid for one year. During the time of renewal, the policyholder has the option to renew the existing policy or move to a different insurer. There is also a provision to shift during the policy term, which will require the policyholder to cancel the existing policy and take the refund before buying a new policy.
Here are some basics you should know before you decide to port your motor vehicle insurance policy.
When To Port Your Motor Insurance Policy: Typically, one ports a policy if he/she is not satisfied with the services being offered by the insurer.
Says Animesh Das, senior director-motor underwriting, ACKO, a general insurance company: “A car insurance portability comes into play in situations where the policyholder is not satisfied with the service levels of the insurer or gets better pricing for the same product with another insurer, or, if the insurer or the agent has mis-sold the policy.”
Things To Know: Ashwini Dubey, head - motor insurance renewals, Policybazaar.com points out a few things.
He says: “At the time of renewing the motor policy, there is no loss incurred by the customer on opting for a different insurer. Customers can choose the insurer that provides them with the most benefits and seems cost-effective to them. However, if the customer wants to change the insurer or the motor insurance plan during the policy tenure then, he/she might have to incur some losses on certain benefits.”
First, the premium would be refunded after the deduction for the coverage period. This amount of deduction depends on the insurer and the policy or plan opted for. Second, the customer may also need to look at the no claims bonus if changing the insurer mid-term.
For instance, while cancelling a comprehensive policy and buying it from a new insurer in the middle of the policy term, the customer may not be eligible for the next slab of the no claims bonus, as according to the regulator, a full year of coverage without any claim is the mandate to be eligible for the next no claims bonus slab.
What To Keep In Mind: It is recommended to buy a policy directly from the insurer’s website, as it is cheaper and ensures that the customer gets the right product.
The policyholder can change the insurer and coverage in case there is a change in location or when the driving usage has changed.
“In such a case, it’s better to check a few options and select the best plan. However, mid-tenure policy portability might not serve as very useful, as the previous insurer may just return only a part of the refund,” says Das.
