A car insurance policy covers for financial loss, damage to your vehicle or third-party liability. It protects your vehicle from all sorts of unanticipated risks. A car insurance policy has to be renewed once every year. Failing to do so before the expiry date results in a ‘lapsed’ or invalid policy.
As per the Motor Vehicle Act 1988, a car cannot ply on public roads without a valid third-party insurance policy. This policy ensures that you are covered against any damage caused to a third party in the event of an accident. However, most car owners don’t just stop at 3rd party coverage. Many also opt for comprehensive coverage which insures their vehicle and the driver against any damage as well.
Missing a car insurance policy renewal date can cause a lot of hassles, not to mention financial loss, to the car owner. Here are some reasons why you should not miss the renewal date of your car insurance policy.
- Zero Protection: An accident can occur anytime, anywhere. If you don’t have an insurance policy in such a situation, it’ll burn a big hole in your pocket, and you will have to pay for all the damages by yourself. While it is illegal to drive without a Third party insurance (TP Only) insurance, no policy can lead to significant financial losses.
- Tedious Process of Survey: Once you miss your renewal date, the car will have to be surveyed by the inspector assigned by the insurer, to check the damages are covered under the policy or not. The entire process of inspection can take 2-3 days easily. All the existing damages are recorded during the survey to ensure if they are covered under the new policy.
- Possible Loss of No-claim bonus (NCB): If your policy is lapsed for more than 90 days, it could mean the possible loss of your accrued NCB (No claim bonus). Imagine losing 40-50% NCB that has been collected over the years. It can be a significant financial setback
- A Higher Premium: You are at a better position to negotiate when you are renewing your policy well within time. However, you miss out on this power if your policy is already expired. Some companies may charge you a higher premium on renewing a lapsed policy
- Mental Hassles: While there are financial losses associated with a lapsed car insurance policy, it can also cause a lot of mental stress as well. Right from searching for a car insurance company that will agree to renew your policy to getting your car surveyed, getting a valid policy, the process can be quite stressful. Moreover, you cannot drive the car legally without a valid car insurance policy.
Try to avoid last-minute rush and get your plan renewed well before the due date. Set reminders if you’re forgetful. Some insurance companies send automated calls or emails to alert customers of their upcoming car insurance renewal. In case your policy has expired, choose an insurance plan, get a vehicle survey appointment and get the policy immediately after it’s granted. The inspection stays valid for the next 24 hours only, so you have to decide within that period.