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Car Insurance Lapse

By Finserv MARKETS - Oct 27,2020
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Everything about Car Insurance Lapse

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About Car Lapse 

The foremost requirement before you drive on the roads in India is having a valid car insurance. A comprehensive four wheeler insurance will provide coverage in case of damages to your car, arising from an accident. Besides, it also protects you from any third party claims. The Motor Vehicle Act makes it mandatory to have third-party insurance. 

There can, however, be a situation where you fail to renew your car insurance on the stipulated date, resulting in car insurance lapse. There can be manifold reasons for not renewing your car insurance in time: official work, illness, forgetting the due date and so on. Wondering what happens if car insurance lapses? Take a look at the repercussions of such a scenario. 

What Does It Mean By Car Insurance Lapse

Once you avail a four wheeler insurance policy, you have to renew it on an annual basis. The policy document clearly mentions the renewal date and time. If you fail to renew the policy within/on the due date, it results in the policy being lapsed. The insurance company, in the case of car insurance lapse, will refuse any claims made for damages resulting from a mishap; either for self or for third party insurance. This means that you have to pay for all damage – again both for the cost of repairs to your car and for damages to third party – from your own pocket. 

The Effects of Lapse in Car Insurance 

 What happens when car insurance lapses? More specifically, are the other possible consequences of a car insurance lapse? If your lapse period is quite long, the insurer can reject your existing policy, and you need to avail a new four wheeler insurance policy at a significantly high cost. This would entail hassles, like getting your car inspected again, and revised premium payments. A lapse also means that if you have gained a No Claims Bonus (NCB), during the previous policy period, you will lose all its benefits. Besides, if you are caught driving without a valid four wheeler insurance by traffic authorities, you are liable to pay a hefty fine. 

How to Tackle Car Insurance policy lapses?

If you find that your car insurance policy has lapsed, you must immediately check if the insurer has provided for a grace period. Typically, insurance companies provide a grace period, ranging from three days to a month. You can easily renew your existing policy within the grace period without incurring any additional costs. 

If the grace period has also expired, then you should consider immediate application for a new policy. While applying for a new policy, you must compare the four wheeler insurance policies of different insurance companies, and select a policy with the most affordable premium. During the new application process you are required to furnish several documents, like previous policy papers, past claims and certificates pertaining to your car. Once you apply for a new policy, the insurer would conduct an inspection of your car to know if there are any pre-existing damages to your vehicle. After completion of the inspection process, the insurer would finalise the premium payment for the new policy. 

How to Avoid Future Car Insurance Lapse

Now that you know what happens if car insurance lapses, you must take all possible steps to ensure that your policy is renewed within the stipulated date. Rather than being dependent on the insurance company for a phone call/ email/ SMS for the renewal process, you must remain alert for the renewal date. You can consider having a reminder on your smartphone or calendar. Most insurance companies offer online renewals, thus dispensing with the requirement of making a physical visit to the company’s branch. You can easily renew your policy online from the comfort of your home, at the click of a button. 

Conclusion 

Thus, a valid car insurance policy is a must for your car. You must avoid driving with a lapsed policy as it can result in several grave consequences like we just went through. If you are applying for a new four wheeler insurance policy, in case of a car insurance lapse, you must select a trusted and reliable insurer. You can zero in on the car insurance plans available on Finserv MARKETS. With cashless claims, the insurance policy ensures that all costs of repairs are taken care of by the company. Plans on Finserv MARKETS also come with a wide slew of add-on covers to enhance the protection to your car. These include roadside assistance, engine protector, consumables cover, personal accident cover and so on. 

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522