Importance of On-Time Car Insurance Policy Renewal
Published On Mar 24, 2021 10:00 AM By InsuranceDekho
On-time renewal of car insurance is quite important. Here are reasons stating why you should not ignore the timely renewal of insurance policy.
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Car insurance plans do not come with a lifetime tenure and hold an expiry date. Some policies are valid for a shorter period of time while some are active for a longer policy period which is more than a year. After the expiry date, the policy expires which denotes the end of the contract between the insurance company and insured individual. Hence, to keep the insurance policy valid, you should renew the policy as it brings several benefits with it. Let’s discuss the importance of timely policy renewal.
Expired Car Insurance Policy Is a Legal Offence
As per the Indian Motor Tariff, it is mandatory for all car owners to own at least a third party car insurance plan to drive a car, otherwise, they can be penalised. Therefore, when a car insurance policy expires, the insurance cover becomes inactive which could attract punishment as driving without a valid insurance cover is a legal offence. So, to protect yourself from heavy penalties due to legal violations, do renew your car insurance plan on-time without fail.
You Bear Financial Risk of Any Damages Caused
A car insurance policy is designed to cover you against financial liability towards a third party for their bodily injuries and property damages as well as damages sustained by your car. Hence, if your car insurance policy gets expired, your coverage could cease and you will be liable to pay for any damages arising due to accident or mishap with the involvement of your car or damage or loss sustained by it. In order to avoid such situations, on-time policy renewal is insisted upon.
Hassle Will Arise to Get Vehicle Inspected
While renewing your expired car insurance plan, your insurance company might insist to inspect your car before issuing a new policy. The inspection process involves the visit of a surveyor at your place to assess the condition of your car, submission of the inspection report, examination of the report by insurer and issuance of a fresh car insurance policy, if the report is satisfactory. It is a tedious and time-consuming task, which can be avoided with the renewal of insurance cover on time.
Higher Premium Cost May Be Charged
During the renewal of a car insurance policy, it is always asked whether your earlier plan has expired or not to determine your premium. The car insurance policies that are timely renewed are charged with lower premiums when compared to plans which are not renewed on-time. Therefore, when your existing policy has lapsed, you might have to pay a higher premium for your next plan.
Accumulated NCB Discount Can Be Lost
For every claim-free year, you earn a No Claim Bonus (NCB) on your car insurance plan which lowers the premium of your next year plan. The NCB increases every consecutive year when you raise no claim, but it can be earned only when your policy is renewed on time. If your policy is expired and you fail to renew it within 90 days of grace period, you can lose the entire accumulated NCB discount. Hence, timely renewal is the best way to save your NCB.
On-time car insurance policy renewals are legally as well as financially imperative, otherwise, you may lose several benefits too. Hence, try never to let your car insurance policy lapse by renewing it timely.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.