Online Motor Insurance Renewal: High Cost Low Value: Beware & Check

It was somewhere around this time last year (2010) when we had written about this business of Online Renewal of Motor Insurance Policy in our article ICICI Lombard Motor Insurance: Online Renewal: High Cost, Low Value, where I ended up renewing the policy from ICICILombard at the click of a button, just to later realize that I have paid a high price compared to what was available elsewhere.
So this year again, my motor insurance policy was about to expire, and I got to check it online for renewal. And here are the findings. In summary, the last year trend continued - the cost of motor insurance renewal was still higher than that of a new insurance policy, that too with a low Insurance Value (IDV).

Online Motor Insurance Renewal: Cost Comparison

Then, I also compared the online quotes from other insurance companies and found that their IDV value higher and their premium is lower, which clearly indicates that blindly Renewing your Motor Insurance Policy Online may not be the best bet. Although it may differ from one insurance company to the other, but this is the case which I've observed with ICICI Lombard for 2 consecutive years.
Here are the findings:
First something about the terms used:
IDV - Insurance Declared Value - This is the amount of money you will receive in case something happens (theft, fire, accidental damage) to your vehicle during the insurance period - subject to pro-rata basis.
Premium - this is the charge you pay for buying your motor insurance policy
In essence, one should look for Policies with less Premium and high IDV values.

Online Renewal of Old Motor Insurance Policy from ICICILombard website:
So when I generate the quote for renewing my insurance policy online, like last year (See those details here ICICI Lombard Motor Insurance: Online Renewal: High Cost, Low Value), I again saw a low IDV and a high premium (something not desirable). Going by last year's experience, I was not surprised. Here is the screenshot of what came up on the renewal for motor insurance - IDV of just 20707-00 and a insurance premium of 876-00. What I was also surprised at that this amount of low IDV and high premium was despite they offering the so-called No Claim Bonus or NCB. This is the bonus you are eligible for in case you have not made any claims in your old policies. Since I have a no-claim record for last 4 years, I was eligible for a whooping 45% NCB . But even after that discounted bonus amount factored in, the IDV value was only 20707 and net insurance premium was high - 876.

Online New Motor Insurance Policy from ICICI Lombard for same vehicle:
So, to make a compare of Renewal v/s New Policy purchase, I generated a new policy quote for the same vehicle from ICICILombard.com website. Like last year, it was showing HIGHER IDV 20757 and LOWER premium charge of only 721-00 compared to those for the renewal policy option, for the same old vehicle.
I was mentally prepared for this as this was what I observed last year as well. But again, the question is if a loyal customer is renewing his policy with the insurance company that too on his own through internet (with no effort from the insurance company agents), should he be charged a higher amount or should he be given some discount??
May be I am missing something here as I am not an insurance expert, but I do understand things from a customers' perspective.
If I go for online renewal from ICICILombard, I am being charged higher insurance premium and get a low value IDV.
If I go for new online policy, I am charged a compartively less insurance premium and get a slightly better IDV.
What do we call this - easy insurance renewal at the click of button, or fooling around with loyal customers?

Anyways, I decided to check on some other insurers. Here is what I got on other insurance websites:

Online Motor Insurance Quote from IFFCO-Tokio general Insurance company:
I generated the quote for the same vehicle from IFFCO-Tokio insurance website. And here is what I got:
For the same vehicle, IFFCO-Tokio provided an IDV value of 27,400-00 and the net premium was 806 Rs.
I then added the No Claim Bonus (NCB) of 45%, since there was no claims made by me in my previous ICICILombard Policy in last 4 years, and with the same IDV value of 27400-00, the net insurance premium came down to just 632 Rs.

Online Motor Insurance Quote from Bajaj Allianz Insurance:
Here is what I got from Bajaj Allianz Insurance website for my vehicle insurance policy:
IDV value: 23171, Insurance Premium: only 624 Rs. with 45% No Claim Bonus (NCB).

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Conclusion about renewing your insurance policies online:
In essence, it all looks sweet and easy to use - Just login to the insurance website, click a few buttons, make payment and there you have your policy to print. But the fact is that being a customer, you need to look for better value (High IDV amount) with less money (low premium amount). To reiterate again, I'm not an insurance expert but I am surely an insurance policy customer. My experience with ICICILombard for their online renewal mechanism has not been positive one - as a customer, I want to pay less and get more. Online Renewal isn't allowing that to happen. It's a kind of surprise that from the same insurance company, the renewal charges are higher with less IDV as compared to buying a new policy. That is not what a loyal customer would like.
So finally I settled for one of the other insurance provider - one that was providing me higher IDV with low Insurance Premium. I dont know how will they treat me next year and quite possible that I might again get into the same situation with them as I have observed with ICICILombard in this and previous year. But that's something which will come up next year.
So One thing is certain - I will definitely check and shop around for a better deal - Always! And that too can be done online, no need to run around with you vehicle from one insurance company office to the the other. Hope the readers also do the same.

ICICI Lombard Motor Insurance: Online Renewal: High Cost, Low Value

You all must have seen the recent ad of ICICI Lombard Motor Insurance. This ad has a person mentioning the following: "Raat ke 11 baje the, motor insurance khatam ho raha tha. I got it online at ICICILombard.com". Basically meaning that "It was 11 PM at night, my car insurance coverage was getting over, so I just logged onto ICICILombard.com and got it at an instant.

This ad from ICICI Lombard Insurance, sometimes comes in solo, or clubbed with other ads like that of Travel insurance, etc.

So I thought of giving it a go. Had bought a vehicle last year and the vehicle seller had not offered me any choice of selecting the insurer for my vehicle hence I was forced with this ICICILombard Policy.
Now, it was nearing 1 year, so I decided to renew it online. See what happened.

When I tried to generate a quote for a new insurance (not a renewal) for my vehicle on ICICILombard.com, I was quoted a price of around 930 Rs.

However, when I asked for a quote for renewing my existing policy for the next year, it was higher 1076 Rs. Unfortunately, I generated the new insurance policy quote after I had opted for renewal, so lost 140 Rs. in the process.

That is the cost of getting everything at the click of the button from your office/home.

What is more interesting is the Insurance Declared Value - there has been a significant reduction in the IDV value of my vehicle (more than 13% reduction), but the premium then charged for the renewal was increased (almost 15% increase - from 930 to 1076 Rs.)

Now I agree that IDV can go lower as time passes by, but why to charge heavily (as high as 15% extra), just because a customer is renewing his insurance.

Is this the way the loyal customers are to be treated???

Then, as another sample check, I tried generating a quote for my vehicle on Bajaj Allianz Insurance Site. For the same vehicle, I got a price quote of the same 930 Rs. from Bajaj Allianz. Had I took my vehicle to a nearby Bajaj Allianz Insurance shop (just 1 Km from my place), I would have saved almost 150 Rs. (that's more almost 15% savings). Even if I had taken my vehicle to ICICI Lombard shop (around 3 Kms), and instead of renewing my exisitng policy, had I opted for a new one, I would have again saved the same amount of money from the same insurer.

What I cannot understand is why this kind of malpractices exists. I agree that a company needs to invest in infrastructure and operational costs for IT services, but is it justified to charge extra from a customer who is renewing the same policy, that to to the tune of 15% high premium??

I managed to identify this after paying the price. Do ICICILombard expects a customer to remain loyal to them with such practices??

Next time, I would better take my vehicle to a government insurance company office and get it insured. If I may not like to go for government insurance companies, then I will take it to the same ICICILombard counter, and instead of renewing the policy, I will buy a fresh one.

Must have Insurance Policies: 6 Insurances every individual must have

There are hundreds of kinds of insurance in the world. Most of the individuals end up beating their heads pondering about which insurance to take and which one to avoid and at the end of all the head-ache, they take whatever their insurance agents advice them to take. Most of the times, these insurance advised by the agents are those which earn the agents the maximum commissions, and not necessarily those which give the insurance buyer the best and cheap insurance quotes. Below, we have configured a list of insurance policies which each individual should have (as per our experience and analysis). We have attempted to provide some detailed justification about why our proposed insurance is a must have. Anyways, The readers are advised to use their own heads to assess their own situation. Also, insurance rules vary from one country to the other. Please take those factors also into consideration. The recommendations are based upon our own experience, studies and various resources and articles available on internet and print media.

1. Life insurance:
The no. 1 in our list of recommended insurance is the most obvious one, the Life Insurance. It helps your dependents and family members take the benefit in case of your untimely death. It is a must have for the earning member of the family. Also recommended for both the parents in a single family, if there is clear segregation about the duties.

2. Health insurance:
You work your entire life for a better and comfortable lifestyle. However, one fine day you may end up in a situation where due to your highly stressed life or just by chance of you meeting an accident, you end up in a hospital and see all your hard earned money being taken away by the hospital bills and the doctors. So, health insurance is a must have for all.

3. Home insurance: This may or may not be applicable to all, but you must consider taking a house insurance especially if you are living in an accident prone area - like near sea shore (for tsoomani kind of calcmities), near a volnaco area or riverside which may get flo_d at times. Another thing is that A house is the biggest investment for any common man. Replacing it is not even thinkable, so please consider this seriously.

4. Professional indemnity insurance: It is so very common for companies to file legal lawsuits against individual employees working for them. Even worse, in countries where legal system is helpless, anyone can be put behind bars anytime. It is therefore very important that professionals like doctors to get insured in case of any legal action taken against them by their patients.

5. Disability insurance: This is usually covered as a part of life insurance, so check your policy documents carfully. If your life insurance policy does not cover disability insurance, then better buy it as a top up or as a seperate policy. Accidents can happen to anyone at anytime. Nobody is immune to accidents. This has further increased the possibilities of you getting disabled. So insure yourself against these unfortunate events. Disability has emerged as a big worry in the present uncertain times.

6. Auto insurance: Another important and must have insurance, probably that's why many countries in the world have made it compulsory for people to have motor insurance, car insurance or auto insurance for every single vehicle. A sure must have insurance.