Steps to Renew Car Insurance Policy in Pakistan

Introduction: The One Task That Can Save You From Major Financial Loss

Car insurance renewal is often treated as a routine yearly task by most vehicle owners in Pakistan.

You receive a renewal reminder message from your insurer. You think:

“I’ll renew it later this week.”

Days pass. Life gets busy. Work schedules pile up.

Your insurance policy quietly expires — and you don’t even notice.

Now imagine this:

A few days later, your car is damaged in a minor accident while driving through Karachi traffic. You immediately file an insurance claim expecting repair coverage.

But the claim is rejected.

Why?

Because your insurance policy expired two days ago.

This situation is more common than people realize.

Insurance renewal delays can lead to:

• Claim rejection
• Financial liability
• Higher premium during renewal
• Loss of No Claim Bonus (NCB)
• Policy lapse penalties

Renewing your car insurance policy on time ensures uninterrupted protection against unexpected losses such as accidents, theft, or natural disasters.

Understanding the correct steps involved in renewing your insurance policy can help avoid coverage gaps and financial risks.

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How Comprehensive Car Insurance Works

Comprehensive car insurance provides coverage against:

• Road accidents
• Theft
• Fire damage
• Natural disasters
• Vandalism
• Third-party liability
• Riots or civil disturbances

Unlike third-party insurance, comprehensive coverage protects both:

• Your own vehicle
• Damage caused to other vehicles or property

When you renew your insurance policy:

• Your coverage remains active
• Your claim eligibility continues
• Your premium is recalculated based on risk

If your policy expires and is renewed late:

• Claims during lapse period are not covered
• Premium rates may increase
• No Claim Bonus may be lost

Continuous policy renewal helps maintain claim eligibility and financial protection.

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Who Should Buy It?

Timely insurance renewal is important for:

• Daily commuters
• Owners of financed vehicles
• High-value vehicle owners
• Drivers in urban cities like Karachi
• Individuals living in flood-prone areas
• People who park vehicles outdoors
• Long-distance drivers

Even minor repair costs can be expensive:

• Bumper repair: PKR 15,000 – 40,000
• Headlight replacement: PKR 20,000 – 60,000
• Door repainting: PKR 10,000 – 25,000

Maintaining active insurance coverage helps manage these unexpected expenses.

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Benefits

Continuous Financial Protection

Timely renewal ensures uninterrupted coverage.

Claim Eligibility

Active policies allow claims to be processed smoothly.

No Claim Bonus Retention

Renewing policies on time helps retain NCB benefits.

Legal Compliance

Insurance helps protect against third-party liabilities.

Premium Stability

Avoiding coverage lapse helps prevent premium increases.

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Limitations

Despite its advantages, comprehensive insurance may not cover:

• Mechanical breakdown
• Wear and tear
• Driving under intoxication
• Unauthorized driver usage
• Commercial use of private vehicles
• Damage caused by negligence

Policy exclusions should be reviewed carefully before renewal.

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Estimated Cost in Pakistan

Insurance premiums typically vary based on vehicle value:

Vehicle Value	Estimated Annual Premium
PKR 10 Lakh	PKR 18,000 – 25,000
PKR 15 Lakh	PKR 25,000 – 40,000
PKR 20 Lakh	PKR 40,000 – 55,000
PKR 30 Lakh	PKR 55,000 – 80,000

Premium may change during renewal depending on:

• Claim history
• Vehicle usage
• Driving record
• Coverage type

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Factors That Affect Premium

Insurance premiums are influenced by:

• Driver’s age
• Driving experience
• Claim frequency
• Vehicle type
• Security features
• Deductible selected
• Location risk level
• Coverage options

Drivers with fewer past claims may receive lower renewal premiums.

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Real Example Scenario

Noman owns a 2020 Suzuki Civic insured under a comprehensive policy.

His policy expires on June 15.

He delays renewal until June 20.

On June 18, his parked car is damaged due to a minor collision.

Repair estimate:

• Front bumper: PKR 30,000
• Headlight: PKR 25,000
• Fender repair: PKR 15,000

Since his policy had expired at the time of the incident, his claim is rejected.

He pays the full repair cost himself.

Timely renewal could have prevented this financial loss.

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Tips Before Buying

Before renewing your insurance policy:

• Set renewal reminders
• Review policy exclusions
• Compare premium rates
• Confirm coverage limits
• Understand deductible clauses
• Update authorized driver details
• Maintain claim-free record
• Store policy documents safely

Proactive renewal helps avoid coverage gaps.

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FAQs

Can late renewal affect claim eligibility?

Yes. Claims during lapse periods are not covered.

What is No Claim Bonus?

A discount provided for claim-free years.

Can premiums increase during renewal?

Yes, based on claim history and risk assessment.

Is renewal mandatory?

It helps maintain financial protection and claim eligibility.

How early should I renew?

Before the policy expiration date.

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Conclusion

Renewing your car insurance policy on time ensures continuous financial protection and claim eligibility.

Policy lapses can lead to claim rejection and higher premium rates.

Understanding the renewal process and maintaining active coverage can help avoid unexpected financial burdens.

Insurance is not just about purchasing coverage — it’s about maintaining it consistently.

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Author Bio

Ahmad Raza is an automotive insurance researcher and financial writer with over five years of experience analyzing motor insurance policies in Pakistan.

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Sources / References

• Securities and Exchange Commission of Pakistan (SECP)
• State Bank of Pakistan Insurance Guidelines
• Pakistan Insurance Association Reports
• EFU General Insurance Motor Policy
• Jubilee General Insurance Coverage Terms
• Adamjee Insurance Motor Insurance Guide