Last week, Subodh Mishra, a 36-year-old IT professional from Bangalore, was stopped by a traffic police officer for a routine inspection. As Subodh handed over the papers, he realised his insurance had lapsed 2 months ago. He wasn’t just embarrassed; he also had to pay a fine. The next day, he renewed his policy. While the car insurance renewal was quite smooth, Subodh had to undergo a detailed car inspection. He also realised that in a few more days, he would have lost his entire NCB of 50%.
What might have been seen as a harmless oversight turned into a legal and financial burden for Subodh. Many vehicle owners often forget to renew their motor insurance on time. Let’s understand what happens if car insurance expires in detail and how you can avoid a policy lapse.
Your Car Insurance Has Expired! What Does It Mean?
Every motor insurance plan is valid for a specific duration, and only if the insured renews the policy before the end of such duration does the policy continue. If the insured fails to renew the policy before the end of the tenure, the car insurance is considered expired. Once a motor insurance policy expires, the coverage offered by the insurance company comes to an end.
For the convenience of policyholders, insurance companies offer a 30 to 90-day grace period, allowing policyholders to renew their policy without losing benefits like No Claim Bonus (NCB).
What Happens if Your Car Insurance Expires?
A car insurance policy is not just a policy document that you carry, but rather a legal and financial protection shield. Still not sure about the consequences of not having valid car insurance? Here are some potential risks of expired car insurance:
1. Failure of Legal Compliance
According to Section 146 of the Motor Vehicles Act 1988, every vehicle owner is required to have a valid motor insurance policy. Failure to have a valid motor insurance can lead to hefty fines and penalties. Failure to comply with the law is something you would want to avoid in any given situation. Also, remember that according to the Motor Vehicles Act 1988, as a car owner, you are required to have at least third-party car insurance.
2. Financial Burden during Emergencies
A comprehensive car insurance policy is a financial shield that protects you from financial burden during emergencies. In any case, if your car is involved in an accident, car insurance covers both your own damages and those of third parties.
In the case of Subodh Mishra, imagine that due to an unfortunate event, he was involved in an accident and damaged another car. Not only did he face legal challenges, but he also incurred a financial setback covering the damages to his own car and that of a third party.
3. Out-of-Pocket Expenses-Repairs
Regardless of the car you drive, timely servicing, repair for normal wear and tear, and other necessary maintenance are essential to keep your car performing optimally. Without insurance, you must bear these expenses out of pocket. Generali Central offers motor insurance policies that provide coverage for servicing, repairs, 24/7 roadside assistance, and more.
4. Missing Out on NCB
Failure to renew car insurance plans within the specified time can also result in the loss of the accumulated no-claim bonus that you would have enjoyed under your policy.
What is No Claim Bonus? Insurance companies offer benefits at the time of policy renewal if the insured hasn’t raised any claims during one policy year. Now, a no-claim bonus can go to 50%? This means a discount of 50% on your upcoming premium!
5. Challenges During Policy Renewal
Renewing your car insurance after the stipulated tenure can make the process a hassle. For instance, the insurance company may require a new vehicle inspection or charge higher car insurance premiums for the same set of coverage.
What to Do If Your Policy Has Expired?
Still wondering what happens if car insurance expires or you have missed the renewal deadline and your car insurance has expired? There’s no need to panic. Here are a few things to keep in mind:
Did you know? Surveys suggest that around 24% of respondents in Mumbai, 28% in Delhi, and 25% in Bangalore failed to renew their policies on time.
Avoiding Policy Lapse with These Simple Tips
Renewing a car insurance policy is something that might slip your mind. Here are a few tips that can help you avoid policy lapse without you having to keep a constant track of it:
1. Set Reminders for Renewal
The easiest way to renew your policy on time is to set reminders on your calendar. Many insurance companies also send alerts and reminders before your policy is about to expire.
2. Consider Multi-Year Policies
Renewing a car insurance policy every year can sometimes become a hassle. This is why you should consider purchasing multi-year policies. In addition to avoiding policy lapse, multi-year policies may also come with additional benefits, such as affordable premiums.
3. Opt for Automatic Renewal
Contact your insurance provider to set up an auto debit by linking your bank account. This ensures that all premiums are paid on time and the policy is automatically renewed.
Closing Thoughts
Buying car insurance plans in India is not just a legal requirement; it safeguards you against future legal and financial burdens. Driving your vehicle without a valid insurance policy can get you in serious trouble. Set reminders for renewal, consider purchasing multi-year policies or opt for automatic payments to avoid policy lapse.
If you want to renew car insurance policy, consider exploring car insurance online that offers enhanced coverage at an affordable premium.
