Why Is It Important to Renew Car Insurance on Time?
Updated On Oct 15, 2023
Procuring car insurance is mandatory while buying a car and it is important to renew them periodically to avoid legal problems and to experience the complete benefits of the insurance policy.
Car insurance policies come with an expiry date that is defined by the terms of the policy. It is important to renew the policy periodically to experience its benefits completely. If it is not renewed within the stipulated time, then it is considered a lapsed policy, and no insurance provider will entertain claims of a lapsed policy.
Why It Is Important to Renew the Car Insurance On Time?
Some people do not give importance to an insurance policy and consider it to be an unwanted expense. But it is mandatory to keep a valid insurance policy for the vehicle in India and it also helps them from legal and financial liabilities. Reasons why renewing car insurance on time are as follows:
1. Renewing After Due Date Can Be Critical:
Not renewing the policy on time, can result in a huge financial loss. In case the car meets with an accident when it doesn’t have insurance cover, then the claims will be rejected by the insurance company. Also renewing after the due date can result in paying penalties along with premiums. At times, the insurance company can demand a complete car check before renewing the premium.
2. Legal Trouble:
It is a legal offense to drive a car with no proper license or to drive with an expired license. The law demands the car owners have at least third-party liability insurance. If the owner gets caught by the traffic police for driving without insurance, then it will be required to pay a huge fine. Also, if the car gets damaged in an accident when it lacks insurance, then the owner has to face a huge legal battle along with a major financial crisis.
3. High Premiums:
Renewing a lapsed policy, or buying a new policy after the old one expires, can end up in huge premiums. Timely renewal of the policy will end up in reasonable premiums and is always the best choice.
4. Loss of No-Claim Bonus:
No-Claim bonus is offered by car insurance companies as a reward for safe driving. For every no-claim year, the insurer will offer a discount on subsequent renewal, or this bonus can be accumulated over years and reflect as discounted premiums in the future years. Failure to renew the policy on time results in the loss of the No-claim bonus and the entire accumulated NCB will also be negated.
5. Zero Protection for the Vehicle:
The car insurance policy will protect against all financial liability arising out of an accident, such as damage to the vehicle, damage to the third party property, injury to self, and others. The car insurance offers complete financial obligations to cover all these implications and failure to renew it can affect put the car owner into serious financial vulnerabilities.
Prompt renewal of the car’s insurance is mandatory to avoid both legal and financial implications. It is better to renew the policy before the grace period, as the period is only to avoid a hike in the premium and not for extending coverage of the vehicle. Renewing on time saves, time, and money and also avoids mental stress.
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.