Why Should You Always Renew Your Car Insurance Policy on Time

Posted on: Jan 5, 2022 | | Written by:

Why Should You Always Renew Your Car Insurance Policy on Time

Published on January 03, 2022. EST READ TIME: 3 minutes

Owning a four-wheeler is not only a matter of pride in India but is also a matter of convenience. Having a car at your disposal allows you the independence of mobility as per your liking. Additionally, being a car owner also means that you have to adhere to government laws and regulations. One such law is to have a car insurance policy, the Motor Vehicle Act, 1988 makes it necessary to have a car insurance policy and its amendment in 2019 reiterates penalties on car owners if uninsured motor vehicles.

However, thanks to our busy schedule or by an act of carelessness, you might forget to renew your insurance or you might simply choose to postpone your renewal date for convenient reasons. Needless to say, owning a lapsed car insurance policy will get you in trouble with the traffic authorities, and will also restrict you from claiming anything from your car service provider in case of an accident. It thus becomes imperative to ensure that you have a valid car insurance policy. According to a report, 26% of Indians have a lapsed car insurance policy, in case you are one of them, this article is for you, where we will be exploring why having a lapsed car insurance policy is a bad idea.

What is a car insurance policy lapse?

Similar to other insurance policies, a car insurance policy lapse is a state where you fail to pay your car insurance policy premium on or before the due date. This results in you having a lapsed car insurance policy. This is in violation of the law and also makes you vulnerable to penalties and significant financial loss.

Common reasons why car policy could lapse

The major reason for a car policy to lapse is the non-payment of the premium amount on the due date. This could be due to negligence, carelessness, or financial limitations. Whatever the reason may be, it is imperative that you have a valid car insurance policy.

What happens when your car insurance policy lapses?

The first thing that happens when your car insurance policy lapses is that you are not eligible to claim anything from your car service provider in case of an accident. This would subsequently mean that you have to shell out more money in case of any damage to your vehicle. Secondly, it is against the law to be driving with a lapsed car insurance policy. This can lead to you being penalized heavily, there are also chances of your vehicle being impounded by the transport department. You also run the risk of your license being suspended or finding yourself entangled in legal court hearings. You also must consider the fact that in case there is a significant gap between your lapse date and renewal date, you could end up paying a significant premium; there are chances that your renewal may be rejected as well.

Actions to consider taking if your policy has lapsed

The first step to take when your car insurance policy lapses is to contact your insurer. They might be ready to consider renewing your lapsed policy. In case you decide to buy a new car insurance policy, feel free to explore and compare several car insurance providers and opt for a car insurance policy. An ideal car insurance renewal provider is HDFC ERGO. It offers comprehensive, third-party insurance, standalone own damage cover along with several choices of add-ons and personal accident cover.

While you are renewing your car insurance policy or buying a new one, ensure that you have your vehicle’s Registration Certificate (RC) handy along with your previous car insurance policy

Conclusion

Having a valid car insurance policy is extremely essential in terms of legal and government compliance, the safety of yourself and others, and to ensure that you do not have to end up bearing the entire cost of any damage that may occur to your car. As a good samaritan, it is imperative that you have a valid car insurance policy whenever you are driving. By doing so, you not only are following the law but also ensuring that you are protected at all times.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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