It usually happens that people forget to pay various bills on time. Some even miss paying the minimum outstanding dues for their Credit Card. If you’ve done it too, that means you know the difficulties that one has to face when paying dues as well as various penalties.
However, know that these late payments or non-payment of dues apply to motor insurance as well, and not only to loan products. If you do not renew your motor insurance policy on time, you might face trouble. When you purchase an insurance policy, you also have to renew it annually to keep it active. If by any chance you miss out on this date, your policy will break and you will have to buy a new policy from an insurance provider who will offer you coverage for your car again.
Some people genuinely forget the insurance renewal date, while some do not feel the need to pay the premium. What you might not know is that it is mandatory for every vehicle owner to at least have a third-party liability policy, as per the Motor Vehicles Act, 1988. If you drive your vehicle on Indian roads without having a valid policy in hand, penalties will be charged if caught. Also, you might face huge financial losses in repairing your vehicles, without a car insurance policy. If you get involved in a road accident and cause damage to a third-party person or property, it becomes your responsibility to look after it. Along with that, you will also lose all the accumulated benefits such as NCB. No Claim Bonus is calculated in percentage and provides up to50% savings on your premium amount. After policy lapse, your insurance provider may have a grace period of 30 days as a second chance to get your policy renewed. If you fail to do so even during this period, you will miss out on all the accumulated NCB and it no longer could be transferred to your new vehicle. If you get involved in a road accident and cause damage to a third-party person or property, it becomes your responsibility to look after it.
No matter what your reason is, if you forget renewing your car insurance policy or delay doing it by even a day, it will lapse. You cannot drive without an insurance policy, which means you will have to apply for a new one and go through the entire process of purchasing a new policy all over again. If you want to buy a third-party liability cover, the process shouldn’t take much time and there is a chance the insurance company might offer it to you even after a break-in. You must keep in mind that your insurance provider won’t provide coverage for any insurance claim that was made when your vehicle remained uninsured. On the other hand, if you want to opt for a comprehensive policy, there will be a slightly longer process comparatively.
If your comprehensive policy lapsed, you will need to fill in a fresh proposal to insure a new vehicle. After which the insurance company will send in a representative to inspect your car to look out for any pre-existing damages to the vehicle.
Now you know how many losses as well as complications you would have to go through if you don’t renew your policy on time. Therefore, it is suggested that you do it before the renewal date itself by setting a reminder on your phone. Even if you don’t do it, the good news is that the insurance company has started sending text messages or emails alerting you about the insurance renewal date. You can now carry out the entire process within a few minutes on the web and even get a digitally signed policy.