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Car insurance policies are bound to overlap when you change providers or switch to a different plan. The reasons for change can be aplenty, such as better coverage, lower premium rates etc.
Sometimes these overlaps are wanted since it’s a bit risky to drive on roads without insurance. The new policy activation may take some time to activate. But if you want, you can avoid car insurance overlapping simply by choosing the activation and cancellation dates more strategically.
In this article, we’ll help you switch plans strategically to avoid insurance overlap. Let’s get started.
Car insurance overlap means having two active car insurance policies for a certain duration. This usually happens when you’re switching to a new plan or provider. During this time, you pay for two insurance policies. However, this doesn’t double the protection since you’re eligible to file only one claim in the event of an accident, and only one of the insurance companies can address that claim. You’re not entitled to double coverage even if you’re paying premiums for both the plans.
A short car insurance overlap is generally beneficial as it saves you from driving without coverage in case there’s a delay in assigning a newly purchased insurance policy. Let us move ahead to address some important questions.
Yes. And there are many reasons for that to happen. In some cases, car owners (policy buyers) are aware of the double coverage but some buyers aren’t aware of the two active car insurance policies running parallelly.
Under What Circumstances Do these Plans Overlap?
The car insurance plans expire on the renewal date, usually exactly after a year, not even a day before the due date. It is always good to look around and compare policies before you opt for one. However, if you wish to switch to a better plan later, it is important to check the renewal date to figure out the duration of overlap.
Some car dealers in the UAE offer car insurance coverage by default with a new vehicle. This is primarily to avoid the hassle of finding and buying a car insurance policy. Some of these dealers have their own insurance services that offer free coverage for the first year. In such cases it is important to get a clarity on insurance policies and renewal date. If you miss out such details, it is highly likely that you’ll make a pre-mature insurance purchase that can lead to car insurance overlap.
Couples generally prefer to combine their car insurance policies to reduce premiums. If you are planning to add your vehicle to any other car insurance policy, you must first cancel the existing one. If you fail to do so, you may end up creating an overlap. Some buyers expect the policy to lapse automatically but is remains active for as long as it is paid up.
If the overlap occurs for an extended period, you may face some issues. Here is a list of what exactly:
It’s difficult to file claims and get them approved if there are two insurance providers involved. Usually, the insurance company that the buyer was registered with earlier must cover losses in case of an accident. However, the provider can deny claim on account of violation of terms. As per the policy terms, having two active insurance plans enables the policyholder to make a profit from the claim where the real motive of the insurance policy is only to cover for losses.
In case of two active car insurance policies, both the insurers may try to justify why they should not be responsible for the loss. As a result, there can be delays in settling the claims. Usually, this happens when you have more extensive coverage in one plan in comparison to the other. It can lead to a lot of debate adding more stress to an already hectic situation. So to avoid any delays, it is best to keep only one car insurance policy active at a time.
This is the most obvious issue you will face when having car insurance overlap. You need to pay for two insurance policies where a single one is sufficient to provide coverage against any possible loss or damage caused to your vehicle. Even if you want to cancel the old insurance policy, you can get the refunds only on a pro-rata basis. So, to avoid paying any extra charges, make sure you do not overlap your car insurance.
Here is a list of a few simple to follow:
First, you need to find a new car insurance provider and ask for quotes from the chosen insurer with the coverage amount based on your financial needs. Do not forget to include the add-ons you want to buy so you have the final evaluation. It’s important to be honest about your driving history, habits and claims filed in the past. Any discrepancies in the information provided can make the approval process even longer.
Once you select a car insurance plan, you must opt an effective date for your new insurance policy and pay your first premium to complete the purchase process. After making payment, your insurance policy will be activated and you can cancel the old one without having any lapse in the coverage.
Next, you need to file a cancellation request for your old car insurance policy on the same day you have got the new one activated. Make sure you submit the request to the insurer with all the documents required based on their policy terms. In case you are applying for a backdate cancellation, you need to provide proof of duplicate car insurance coverage. Once done, you can apply for a refund on a pro-rata basis.
If you are looking for a new car insurance policy at reasonable rates, you can simply visit our car insurance section and find a suitable plan in just a matter of a few clicks. You can also use the insurance premium calculator on our website to evaluate the estimated car insurance premium for various plans. This helps you select the right insurance plan that’s in line with your budget requirements.