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Lapsed Car Insurance Policy? Here's How to Renew It

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How to Renew a Lapsed Car Insurance Policy?

Life is busy as it is; sometimes it's work, sometimes it's your daily chores, and then there are travel and other commitments. Amidst such chaos, it is easy to forget to renew your car insurance policy. You might have overlooked the renewal notice or have procrastinated for “tomorrow”, and the next thing you know, your car insurance policy has lapsed. Driving without coverage or with a lapsed insurance policy can have severe consequences: you might have to pay fines and higher premiums at renewal, and you might not even have the coverage when you need it the most.

However, what is it that one does in such a situation? First, worry not. A lapsed policy is bad, but it isn't something that cannot be fixed. You can renew your car insurance with just a few simple steps. Are you curious to know more about it? Continue reading as we guide you through the steps and process to renew car insurance policy.

What is a Lapsed Policy?

Let's start with the basics: what exactly is a lapsed policy? A lapsed policy can be simply understood as a policy that is no longer in effect. This may occur due to a missed due date, delayed payment even beyond the grace period, or complete non-payment of the premium. When your car insurance policy lapses, it means all the coverage and benefits offered under the policy are terminated.

Consequences of a Lapsed Car Insurance Policy

Being on the roads without a valid car insurance policy or with a lapsed policy can have severe consequences. Here are some of these that you need to know and be careful about.

Legal Consequences

Under the Motor Vehicle Act of 1988, every owner of a car or bike is required to have third-party insurance. So, if your policy has lapsed and you’re still driving, you’re breaking the law. You will pay penalties or fines if caught. For instance, first-time offenders have to pay ₹2000, while repeat offenders pay ₹4000 for driving uninsured vehicles.

No Coverage

Additionally, comprehensive car insurance policies also cover your vehicle against damages such as theft, accidents, natural disasters, and other similar events. However, a lapsed policy means all these benefits cease, and any damage occurring during this period is not going to be covered by the insurance company. Instead, you are left to deal with the related expenses on your own.

Financial Liability

Imagine your policy has lapsed, and you get into an accident during this time. Result? You pay for your car repairs and damages. Plus, there are damages done to the third-party vehicle. Bearing all these costs from your pocket can take a toll on your budget.

Higher Premiums on Renewal

Lapsed policies are often viewed as risky by insurance providers. This might add to new hassles. For instance, your premiums may increase when renewing the policy. Additionally, you may need to undergo a vehicle inspection and other processes. This can be time-consuming and costly.

Loss of No Claim Bonus

One of the prominent and notable perks of continuous car insurance, year after year, is that you can accumulate your no-claim bonus. Consider this a reward from your insurer for every year with no claims and for being a safe driver. With each claim-free year, your NCB grows and ultimately translates into big discounts on your premiums. However, if your policy remains lapsed for more than 90 days, you may also lose your no-claim bonus.

The Process to Renew a Car Insurance Policy

Simply looking to renew your third-party component? The process is quite easy. You also need not go through any inspection, and a car renewal policy can be availed of immediately.

Alternatively, renewing comprehensive policies or lapsed car insurance is a comparatively elaborate procedure. However, technology and online processes come to the rescue. Here are the three popular models that insurance companies follow for car policy renewals these days.

Without any Self-Inspection

Some renewal processes might be completed without any self-inspection. Sometimes, insurance companies may offer this waiver when the policy break has not been more than 90 days.

Remember: Renewing your policy within 90 days of lapse helps you continue with your accumulated No Claim Bonus (NCB). In the event of any delay beyond this timeframe, it will affect not only your NCB but also your premiums.

With Self-Inspection

The self-inspection model involves uploading photos or videos of your car for inspection via the insurer's official link. It's quick, easy, and often required when renewing a lapsed policy. By doing this yourself, you ensure an accurate assessment and reduce the stress of disputes during the claim settlement process.

Step-by-Step Guide to Renew Your Lapsed Car Insurance

• Gather the Essential Documents
Looking to renew your expired car insurance policy? Why not start by gathering some essential documents that will make renewals easy and smooth for you? Here is a list of essential documents you should look out for.

• Details of your previous policy, including policy number or coverage.
• Details of your vehicle, including its registration number, model, etc.
• Personal information, including name, email address, and contact details.
• Details of your NCB if valid.

• Look for Reliable Insurers
Once you've gathered your documents, it's time to take action. Consider choosing a reliable insurance provider. You may opt to stay with your previous insurer or select a new one. At HDFC Ergo, you can find a variety of car insurance options available, including third-party liability and comprehensive coverage. Furthermore, you gain access to over 9,000 cashless garages in India, along with around 8 add-on options to choose from. You can use factors such as the insurer’s reputation, policy coverage, and premiums to make comparisons and ultimately make a calculated choice.

• Visit Their Official Website
Once you've chosen an insurer for your car policy renewal, consider visiting their official website. The majority of insurance companies allow policyholders to renew their policies online via their websites.

• Fill in Your Vehicle Details
When you're on the insurer's website, look for the ‘Renewal’ option. Here you'll have to fill in your vehicle details like model, registration number, chassis number, and so on. This comes in handy with your vehicle verification.

• Log in with Your Personal Information
Next, carefully fill in your details, including name, address, and contact information. Make sure to fill in all these accurately to avoid any chance of policy rejections.

• Choose Your Policy Type
Once you've filled in the necessary details, the next step is to choose the policy type. Consider whether you need comprehensive coverage or just third-party liability. Also, make sure to carefully review your policy and customise it with suitable add-ons wherever needed. Furthermore, you may also apply your NCB if it is valid.

• Complete the Payment
Now, complete the process by making the final payment. You can use net banking, credit cards, or digital wallets for the same purpose.

Final Word

A lapsed car insurance policy is surely risky. But as mentioned, it is not the end. With the right steps and action, you can easily renew your policy. However, be sure not to keep procrastinating. The longer your policy remains inactive, the more complications it might attract. So, whether it's a few days or a bit longer, be sure to renew your car insurance as soon as possible. Choose a reliable insurer, compare your options, and have your coverage and peace of mind back. Furthermore, you can also prevent your policy from lapsing with timely reminders, automatic renewals, and other available options.

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

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