Many organizations and individuals buy insurance policies, but after they are expired, they make a big mistake of not renewing them. Some forget to renew it, or some think insurance cover is no longer important because they didn’t take any claims.
If you have taken any business or personal insurance services, check the policy’s expiry date and know when you have to renew it. Don’t make the mistake of skipping the policy renewal because it can cost you a lot more later. There are many reasons why you should renew your insurance policy. Let’s find out about it on this blog.
Why renew your insurance policy?
Renewal of insurance policy can offer various benefits. Some of them include:
1. Avoid extra costs
Insurance companies determine the policy premiums according to many factors, like income, age, occupation, medical tests, etc. It ensures that you can continue your policy without any issues. But when you fail to pay or renew your policy. You will go through the same process resulting in extra costs and higher premiums.
2. Ensure extra protection
Many insurance policies offer additional benefits. For example, riders get benefits like critical illness coverage, accidental death, and permanent disability coverage.
The companies also update their policies regularly. While you don’t look at the policy changes every day, insurance policy renewal is when you can become aware of these added benefits and use them in times of emergency. You can also read personal or business insurance blogs to learn more about the extra protection covered in policies.
3. Save yourself from claim rejections
The insurance policy offers benefits only till the due date stated in your policy product disclosure document. If your policy lapses due to failure in renewal, you can’t make any claims.
For example, you have insurance cover for your car and medical expenses lapses. If your car goes through a major accident after the policy is expired, the insurance company will reject your claim, and you will have to bear all the expenses from your pocket.
4. Save your NCB
Insurance policies offer benefits like No Claim Bonus (NCB). It applies as a discount for not making any claims during the policy tenure. When you renew your insurance, you will get discounts on premiums. However, if you don’t renew your policy, you will lose your accumulated NCB. So, renew your insurance policy to get a reduced premium price on your renewed insurance.
When to renew your insurance policy?
The renewal of your insurance policies doesn’t only ensure the continuation of coverage but also provides you with a chance to make new selections and changes. Let’s look at some circumstances that we have covered below:
1. Change in address
Changing your home can be a perfect time to renew your insurance policy. If you check your policy terms, you will find changes in risks due to relocation to different suburbs. It will affect your premiums, so update and renew your policy accordingly.
2. Change in relationship status
A change in marital status can impact your current insurance policy. When you get into any relationship, you can consult your insurer about personal insurance services. Many insurance companies offer combined life and home policies. You can even get discounts on other insurances like car insurance. So discuss with your partner and renew your policies accordingly.
3. Vehicle Usage
When you apply for motor insurance, inform your insurer whether you will use it for personal or business purposes. Also, you need to provide details of the driver if someone else uses it more.
When you incur any changes in your property or business, inform your insurer about it. Any improvements can affect your risks and change your premiums.
For example, when you renovate your property or install new door locks or windows, you need to insure them by adding them to your existing policy.
5. Year ending
Most businesses renew their policies without reviewing them properly. Although it can be time-consuming, you should check your policies at the end of the financial year. Checking the whole year’s paperwork helps to understand the changes in the business. So you can decide what changes you want in your policy.
Renewal of policy help policyholders to check and update them. It avoids situations like underinsurance and higher premiums. Also, when you want to renew your insurance policy, compare various insurers and choose the best option. We hope this personal and business insurance blog helped you to understand the importance of insurance renewal.