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Car insurance policies are valid only for a limited period of time. To continue to enjoy the benefits listed under the plan even after the stipulated date, you will have to renew the policy on or before its expiry. However, if you fail to renew it before the date of expiry, your car insurance may lapse.
In the case of a car insurance lapse, all of the plan’s benefits will cease immediately. This would mean that you won’t be able to raise a claim for both third-party or own damages and that you would have to pay for them out of your own pocket. In addition to that, you will have to suffer several other negative consequences as well.
Letting your car insurance lapse can lead to several negative consequences, which includes getting into trouble with the traffic authorities. Let’s take a brief look at the various ramifications that a car insurance lapse can have.
Your insurer might require you to pay additional fees in the form of penalties to renew a lapsed car insurance policy.
The No Claim Bonus remains intact only as long your insurance plan is active. Once a car insurance plan lapses, you lose all of the accumulated NCB. Since you lose the beneficial effects of NCB, you would have to pay a much higher premium when you take out a new policy.
According to the Motor Vehicles Act, possessing a valid insurance plan is mandatory. Driving your car with a lapsed insurance policy may open you up to hefty fines of around ₹2,000. And in the case of repeat offences, you may even be imprisoned for up to 3 months.
If your car insurance lapses permanently, you have no other way but to purchase a new insurance policy. This effectively means that you might be subjected to car inspections and higher premiums.
Sometimes you may miss paying the renewal premium by the stipulated due date. In such cases, it is crucial to remain calm and not panic. Remember, all is not lost. That said, there are quite a few things that you can do when your car insurance lapses. Here’s a quick look at what they are.
Firstly, check if you’re still under the grace period. Almost all insurers offer a grace period of a few days during which you can pay the renewal premium with a nominal additional fee and renew your car insurance policy.
If you find that the grace period has also expired, the next thing that you can do is get in touch with your insurer immediately. Some insurance companies allow you to renew the policy even after it has lapsed; especially if the lapse is only for a few days.
If your policy has lapsed permanently with no way of renewing it, the next recourse for you is purchasing a new car insurance policy. When applying for a new policy, make sure to compare multiple plans with various insurers to get the best deal. Also, it is advisable to keep all your vehicle documents including the previous policy details handy.
In the case of a new car insurance policy purchase, you will have to undergo a car inspection, which will be conducted by a surveyor appointed by the insurer. Once the inspection is done, you can proceed to purchase the plan.
The best way to prevent your car insurance from lapsing is by renewing your car insurance policy before it expires.
Usually, you would get renewal reminders from your insurer through either an SMS, email, or a phone call a few days before the date of expiry. You can use this opportunity to renew your car insurance policy. Most insurance companies offer online renewals, which dispenses with the requirement of making a physical visit to a branch. This allows you to easily renew your policy online from the comfort of your home, at the click of a button.
However, it is advisable to not rely on communication from your insurer since the chances of you missing it are high. Instead, it is recommended that you remain alert about your car insurance renewal. You could even set up reminders on your smartphone or your calendar in advance to help you remember the renewal date.
Since the consequences of letting your car insurance lapse are severe, it is important to ensure that you possess a valid insurance plan for your car at all times. Always remember to renew your policy on time before its expiry. This way, you can continue to enjoy its benefits without any interruptions whatsoever. If you’re someone who is forgetful, consider setting reminders. Alternatively, you can also choose to opt for long-tenure car insurance policies too.
Also, it is important to select a trusted and reliable insurance company when renewing or purchasing a four-wheeler insurance plan. Visit Bajaj Markets to take a look at the various car insurance plans available for your vehicle. You can even compare multiple plans and pick one that fits your budget and requirements.
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.