Top Reasons to Renew Your Car Insurance Policy On Time
Published On Sep 09, 2021
Renewal of a car insurance policy is essential, but why do you need to renew it before the due date only. Read to know why it is important to renew car insurance on time.
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When you purchase a car insurance policy, it comes with an expiry date. Most of the car insurance plans are available with a one-year policy term and you need to renew them before their due date. Failing to renew your policy on time can lapse your policy, but apart from it, the non-renewability can bring several sorts of troubles as well. Let’s discuss the importance of on-time car insurance renewal.
Importance of On-Time Car Insurance Renewal
Here are the points showing the importance of car insurance renewal before the expiry date:
1. Insurance Renewal Is Legal Requirement
It is mandatory to own car insurance while driving a car in India. To keep it active, you need to prevent it from getting expired and renew it before its expiry date. Driving a car with a lapsed insurance cover is a legal offence and if the policy stops you and you fail to show an active policy, then you may have to face a penalty and the repeat offence can lead to a higher penalty.
2. To Avoid Financial Liability and Outflow
If you fail to renew a third party insurance cover, then you might have to experience legal trouble and you will have to compensate a third party for his or her damage if incurred in an accident with the involvement of your car. On the other hand, the non-renewal of the own-damage cover will make you settle your repair bill on your own. These situations can occur as the insurance company will no longer be liable to compensate your liabilities and expenses if your policy is not active.
3. To Prevent The Grace Period
Car insurance companies provide a grace period after the date of expiry of the insurance policy as an extended opportunity to renew the plan and save it from getting expired. However, during this grace period, the insurance companies offer no policy coverage, which means the insurer will not accept any claim raised during that tenure citing the reason of invalid policy. In simple terms, you should avail this period to renew your cover without any hike in the premium but must try not reaching here as it will be a non-coverage duration.
You may also like to read: Everything About Multi-Year Car Insurance Plans
4. To Evade The Car Inspection
A car insurance company could find the requirement of the inspection of a car before the renewal of its insurance policy if it has crossed its stipulated time to get renewed. The inspection is conducted by the insurance company to assess the current condition of the car and to look for any pre-existing damage that is claimed by the insured person. The process of inspection might take some days to be completed which means your car can go uninsured for some more days. In addition to this, the payable amount of premium can increase after the inspection based on the condition of the car.
5. To Keep The NCB Intact
Every policyholder wants to see the quota of his NCB benefit increasing. The reset of NCB, which means the accumulated NCB discount for not raising any claim for some consecutive policy year can dip to zero, is terrible news. The NCB benefit starts from 20% and can go as high as 50% with continuous five claim-free years. If you fail to renew your own damage component of your policy within the grace period of your plan, the NCB reset can happen. Apart from making you lose your NCB, it will also increase your next year’s policy premium.
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.