Why You Should Renew Your car Insurance Before the Extended Deadline

Written by Sharad Bajaj

Updated On Oct 14, 20232 min read

Why do insurance companies insist you renew the car insurance policy before the expiry date despite having an extended deadline? Read this article to find out.

We buy car insurance to give the car a layer of protection from physical damages in the event of a mishap and have some financial stability for ourselves in such moments of crisis. However, to make sure the car insurance remains valid keeping up with its renewal dates and making sure to renew it before the grace period is crucial, here why:

Why Should You Be Mindful Of Renewing Your Car Insurance On Time?

There are several reasons why being mindful to car insurance renewal on time is important:

1. Legal Requirement: An insurance that is past its renewal date is no longer valid, i.e., it is the same as not having an insurance policy. In India according to the Motor Tariff, driving without at least a third-party car insurance can lead to a fine of Rs. 2,000 the first time and a fine of Rs. 4,000 and/or imprisonment for up to 3 months, the second time.

2. Financial Risks in Case of Mishap: With insurance, you can receive compensation for a number of the aspects in case of a mishap, such as third-party liabilities, cost of repairs etc. However, driving with insurance that is past your renewal date is the same as driving without one. Hence, in case of an emergency you as the car owner will be responsible for the third party liabilities, the costs of your car’s damage as well as any person inside your car during such a mishap. This can lead to heavy financial costs on your part and leave a major dent in your savings.

3. Hassle of Vehicle Inspected: If a renewal is done after the date of the expiry has passed the car insurance companies insist on sending a surveyor to inspect your car before issuing a new policy. The process of the surveyor coming to your place to scrutinize the car and then submit a report can be a long one. This is an unnecessary hassle that can be avoided easily by paying the insurance premium on time. Click here to calculate your car insurance premium.

4. Higher Insurance Premiums: When you contact your insurance provider for renewing your car insurance they will always check to see if your policy has lapsed. In many cases, the insurance premium can be hiked in cases where renewal is done after the policy date.

5. Loss of NCB: No Claim Bonus or NCB is the amount of money that is given as a reward to the policyholder for a claim-free year. Moreover, the NCB increases with every consecutive claim-free year. However, if you fail to renew your car insurance policy on time you risk losing this reward. Click here to know more about no claim bonus in car insurance.

Conclusion

To conclude, having a car insurance policy that has passed its renewal date is no longer valid. In other words, it is the same as not having insurance. This can lead to several issues for you. When renewing do not forget to compare insurance companies, check add-on covers and the cashless garage network of your insurance company. Click here to read similar articles.

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.

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.

Written by Sharad Bajaj

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Sharad is an insurance industry veteran who has managed motor insurance products for over a decade. He helped set up and scale the motor insurance vertical for a leading insurance company in his previous stint. In his spare time, Sharad likes to read and be in tune with nature.