Grace Period in Car Insurance

As humans, it’s quite natural for us to forget due dates and only remember them at the last possible minute. However, in the case of car insurance, you can rest assured due to the grace period offered by the insurance provider! You must have heard this term quite often but what is the meaning of a grace period? Car insurance grace period is the duration within which you can renew your expired four-wheeler insurance policy without losing any benefits. If you end up missing the due date, the insurance company enables you to opt for renewal during the grace period.

Although you do not lose the No Claim Bonus (NCB) in the grace period, your car shall remain uninsured and you won’t be eligible for any insurance claims. This additional duration to renew your car insurance is a huge advantage to owner-drivers but it’s never recommended to leave your vehicle uninsured. Usually, the grace period for car insurance premium payment is 15-20 days. But this varies based on your policy terms where a late fee might be applicable for renewing car insurance in the grace period.

Under the Motor Vehicles Act, 1988, a car insurance policy is mandatory for all owner-drivers. So, let’s understand the outcome of not renewing your insurance policy:

• Legal Issues

As four-wheeler insurance is mandated by law, driving your vehicle without a valid plan can lead to a hefty penalty and the risk of imprisonment. Moreover, a second offence can attract a harsher fine!

• No Coverage

If you do not have an active insurance plan, you cannot raise any claims in the event of an unfortunate mishap. In case of third-party damage or loss, you would have to offer compensation to the victim from your own pocket! Similarly, not renewing your comprehensive car insurance plan would mean no more coverage for your vehicle!

• Loss of NCB

If you have earned a No Claim Bonus by maintaining a claim-free policy year, you can avail a reward on the renewal premium. However, you may end up losing the NCB by not completing the vehicle insurance renewal in the grace period.

• Chances of Car Inspection

Another vital reason to renew your car insurance on time is to avoid the scope of a car inspection. If your policy expires, the chances of an insurance company requesting a car inspection are high which could lead to an increased premium.  

Let’s deep dive into the advantages of opting for car insurance renewal during the grace period:

• Continuous Coverage

The car insurance grace period allows you to enjoy continuous coverage without any breaks. Even though you cannot make any claims during the grace period in motor insurance, renewing within the set duration enables you to continue with your existing plan.

• No Increase in Premium

You can avoid any hike in your car insurance premium that would have been applicable for renewing the plan after expiry! 

• Secures No Claim Bonus

As we mentioned above, the grace period for car insurance renewal secures the No Claim Bonus earned during the policy term. This might not be the case after your insurance policy expires and thus, you can still avail a bonus on your renewal premium!

Follow this step-by-step guide to ensure timely car insurance renewal:

 

Step 1: Visit your insurance provider’s website and head to the ‘car insurance renewal’ section.

 

Step 2: Enter the necessary details on the page such as your name, age, previous policy details, etc.

 

Step 3: Consider the add-on covers available under car insurance.

 

Step 4: Review the policy terms and the premium quote.

 

Step 5: Pay the insurance premium online.

 

Step 6: The renewed car insurance policy document will be sent to your registered email ID.

If you do not choose to renew car insurance within the grace period, your policy shall lapse and you will no longer have any coverage. To secure your four-wheeler with insurance again, your vehicle will have to undergo an inspection. The insurance company shall offer a car insurance premium quote based on the vehicle inspection. Here are the steps that you can follow:

 

Step 1: Contact your insurance company to renew your car insurance plan.

 

Step 2: Offer the vehicle and policy details required by the insurer and set up a time for a car inspection.

 

Step 3: A revised car insurance premium quote will be provided by the company.

In case your car insurance policy lapses after the grace period, here are some crucial points to remember:

 

• Opt for car insurance renewal at the earliest by contacting your insurer or a new insurance provider.

• Avoid driving your vehicle without renewing your policy to steer clear of any penalties. This will also help stay away from potential damage that may affect your vehicle.

• Revisit your existing vehicle insurance plan and review the coverage terms and add-ons for extensive security against perils.

A car insurance grace period can be a lifesaver and helps avoid any additional premium hikes! Now that you know the consequences of failing to renew your insurance policy, make sure to set up a reminder for the next due date.

But have you not purchased car insurance, yet? Well, in that case, you must head over to Bajaj Markets and go through our offerings! With lucrative add-on covers, enhanced coverage and budget-friendly premium rates, you can get a suitable car insurance policy for your car. In case you are worried about the premium quote, you can use our online car insurance premium calculator to estimate the rates beforehand!