Driving your car on Indian roads means you need insurance, and every year it’s time to renew that coverage. This article will guide you through the seven most common mistakes people make when renewing car insurance. By avoiding these pitfalls, you can maximize your policy’s benefits. At Money Moksh, we believe smart finance goes beyond just paying; it involves understanding your choices.
1. Waiting Until the Last Minute
One of the easiest mistakes is letting your current policy expire or renewing at the last moment. Delaying increases the risk of a coverage gap, and a lapsed policy may cost you important benefits like a no-claim bonus. According to one guide on renewing, “renewing car insurance seems straightforward at first. But missing key steps can raise costs, lower coverage, or cause unnecessary stress.” ~ Carandbike
Tip : Set a reminder two to three weeks before expiry, compare quotes early, and complete your renewal to avoid penalties.
2. Failing to Review Your Coverage
When you purchased insurance last year, your circumstances might have changed. However, many simply accept the same plan when renewing without considering whether it still fits their driving habits, their car’s age, or their extra features. For instance, have you started driving less? Has your car aged in a way that certain extras no longer make sense? One recent piece advises policyholders to “review your current coverage” before renewal. ~ Carandbike
Tip : Check your Insured Declared Value (IDV), whether you still need all the extras you bought, and if you could switch to a more suitable coverage option.
3. Ignoring the No-Claim Bonus (NCB) & Add-Ons
If you’ve had a claim-free year, you may qualify for a no-claim bonus, which lowers your premium at renewal. Many mistakes occur when people don’t transfer or claim this benefit, allowing it to go unused. ~ topgearmag
Likewise, buyers sometimes pay for additional “add-ons” (like zero-depreciation cover or roadside assistance) that may not be necessary anymore.
Tip : Ask your insurer about your NCB level, ensure it appears in your renewal quote, and remove add-ons you don’t require.
4. Not Comparing Renewal Quotes or Blindly Sticking with the Same Insurer
“Renewing” doesn’t mean you can’t shop around. One common mistake is simply renewing with the same insurer without checking whether a competitor could provide a better deal. A 2025 article states, “Compare car insurance: why it matters even more in 2025.” ~ Autocar India
Tip : Always obtain at least two or three quotes. Compare premiums, service quality (like claim-settlement history), and features, then make an informed decision.
5. Undervaluing the Importance of Vehicle Age & Usage
Your premium is significantly influenced by your car’s age, usage, and declared value. If you maintain the same IDV year after year without adjustment, you might be paying for unnecessary coverage or be under-insured. One guide advises for “Over 5 years” vehicles, the IDV can be set at 70-80% based on condition to reduce the premium. ~ topgearmag.in
Tip : Be mindful of your mileage, your car’s condition, and modifications, and reflect these factors in your renewal to secure a fair premium.
6. Letting Your Policy Lapse (And Losing Benefits)
Allowing your car insurance to lapse is risky. A recent article highlights that in India, renewal is “crucial for every vehicle owner,” as driving without valid insurance can lead to fines or legal issues. ~ Business Standard
If your policy lapses, you may lose your NCB, your premium might increase, and settling claims could become harder.
Tip : Don’t postpone your renewal while waiting for a better deal; maintaining continuous coverage is more important.
7. Overlooking Regulatory Changes & Digital Options
The insurance market in India is rapidly evolving. New rules, digital platforms, usage-based models, and changing trends mean your renewal choices today should reflect the current landscape. For example, one 2025 article illustrates how digital renewals are now smoother and policy structures simpler.
Tip : Check if your insurer offers online renewal options, if discounts are available for digital payments, and whether you can access usage-based premiums if you drive less.
Current Trends & News : What’s Changing in 2025
For the financially savvy reader of Money Moksh, here are some of the latest changes in the car insurance renewal landscape :
- The Insurance Regulatory and Development Authority of India (IRDAI) is working on extending the vehicle insurance period so that some cars or two-wheelers may not need annual renewal. ~ Policybazaar
- Usage-based insurance models, especially for electric vehicles (EVs) and low-mileage drivers, are gaining popularity in India. ~ insurancedekho
- Online and digital renewal options have become more user-friendly. You can now compare, pay, and activate your renewal in just a few clicks. ~ Carandbike
- The government is considering a 10% increase in third-party motor insurance premiums, which will impact basic renewal costs for many vehicle owners. ~ The Economic Times
These trends mean that when you renew your car insurance, you’re not just extending a past policy. You’re engaging in a changing marketplace. At Money Moksh, we think being aware of these trends gives you a better position to negotiate for better value.
Diving Deeper : How to Handle the Renewal Step-by-Step
Let’s break down how you can apply the above lessons when you renew your car insurance :
- Mark your renewal date : Don’t wait until the expiry. Set alerts or automatic reminders.
- Gather your current policy and usage data : How many kilometers did you drive last year? Did you make any modifications or major repairs?
- Check your claim-free years : Inquire about your No-Claim Bonus status and confirm it appears in the quote.
- Get multiple quotes : Visit your current insurer and at least one or two others. Compare premiums, add-on covers, and claim-settlement records.
- Decide on the right coverage : If your car is older, lower the IDV accordingly. If you drive less, explore usage-based coverage. Remove unnecessary add-ons.
- Check the digital renewal process : If your insurer provides online renewal, see if there’s a discount for digital transactions or if you can bypass agents.
- Pay on time and secure documentation : Once you select a plan, pay before the expiry and download or print your renewed policy. If possible, keep a digital copy in your car.
- Store confirmation and keep paperwork ready : Safely store your policy documents, NCB certificate, and renewal receipt.
- Set a future reminder : As part of good financial management, set the next renewal reminder right after completing this one.
By using this structured approach, you transform renewal from a chore into an informed financial choice.
Conclusion
Renewing your car insurance may seem like a routine task, but if you don’t approach it carefully, it can lead to overpaying, inadequate coverage, or unnecessary risks. At Money Moksh, we emphasize that every renewal offers an opportunity: an opportunity to save money, customize your coverage to your needs, and stay updated with the latest market trends.
Avoid the seven common mistakes—waiting too long, blindly sticking with the old policy, overlooking the no-claim bonus, neglecting to compare, ignoring changes in your car’s profile, allowing your policy to lapse, and being unaware of regulatory updates. Coupled with an awareness of market trends and a systematic renewal process, your next renewal can turn into a wise financial decision.
So, the next time you need to renew your car insurance, approach it thoughtfully rather than mechanically. Your wallet—and your future self—will appreciate it.