As per the Motor Vehicles Act, 1988, car insurance is mandatory for all car owners in India. Anyone caught driving a car without valid car insurance can be punished or fined by the traffic police. However, many times, people who have valid car insurance simply forget to renew their policy before it expires, resulting in a car insurance lapse. In this article, we’ll take a look at what happens if your car insurance lapses and how you can renew a lapsed car insurance policy.
Once you buy a four-wheeler insurance policy, you have to renew the plan before it expires so as to keep your insurance coverage going. The insurance 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 car insurance 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 will have to pay for all damages – again both for the cost of repairs to your car and for damages to a third party – out of your own pocket.
What happens when your car insurance lapses? There are many negative consequences you may have to face if your car insurance has lapsed. Here’s a look at those:
You may have to pay extra fees to renew your car insurance policy.
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.
If you are caught driving without valid four wheeler insurance by traffic authorities, you are liable to pay a hefty fine.
It is better to renew your policy before it lapses in order to avoid unwanted circumstances like getting caught by the police. However, even if your policy has lapsed, you can follow the below-mentioned steps to make sure your car insurance policy is renewed ASAP.
If you find out that your car insurance policy has lapsed, the first thing you should do is check if your insurance company provides a car insurance lapse grace period where you can renew your car insurance policy without any fines or negative consequences. Most insurance companies provide a grace period after your policy lapses, which ranges anywhere from a week to a month. If your grace period has lapsed too, here’s what you can do:
You should immediately apply for a new policy.
While applying for a new policy, you should 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 related 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 and your car insurance will be activated.
Now that you know what happens if car insurance lapses, you must take all possible steps to ensure that your policy is renewed before it expires:
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 about car insurance renewal a week or two before your plan expires.
Most insurance companies offer online renewals, thus dispensing with the requirement of making a physical visit to the company’s branch so you can easily renew your policy online from the comfort of your home, at the click of a button.
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. 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 and enjoy benefits like cashless claim settlement, fast renewals and network garages all across the country. Plans on Finserv MARKETS also come with a wide slew of add-on covers to enhance the protection of your car. These include roadside assistance, engine protector, consumables cover, personal accident cover and so on.
While most insurance companies do not charge a penalty during the grace period, some insurance companies may charge anywhere from 8% to 35% extra during renewals.
If your insurance policy has lapsed beyond its grace period, you will have no option other than to buy a new insurance policy.
If your car insurance is not renewed on time, your policy will lapse, meaning your car will no longer be covered by insurance and you will have to pay for any damages out of your own pocket. If the traffic police catch you driving without car insurance, you may even be fined.
As per the updated Motor Vehicles Act, 2019, the fine for driving without insurance is Rs 2000 and/or imprisonment up to 3 months.
Yes, most insurance companies have moved their businesses online, so renewing an insurance policy online is a simple and quick process.