Lapsed Car Insurance
A lapse in your car insurance policy is best avoided because uninsured vehicles could put you at financial risk should they be involved in an accident or mishap. The Motor Vehicles Act, 1988, mandates third-party car insurance and its 2019 amendment imposes a hefty penalty on owners of uninsured vehicles.
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Lapsed Car Insurance
Despite these regulations, lapsing of car insurance is an unfortunate reality. About 26% of cars in major Indian cities have lapsed insurance policies. In this article, we shall discuss the renewal of car insurance after due date, the consequences of such a lapse, how to get a new policy, and how to take advantage of the car insurance lapse grace period that insurers offer.
You can also find tips on how to prevent your car insurance from lapsing in the first place. Prevention is better than cure, so read on.
What happens when your car insurance lapses?
When your car insurance lapses, you might have to get a new insurance policy. You may also lose the accrued benefits of the lapsed policy, like a no-claim bonus. Besides, getting a new plan can attract rigorous vehicle inspection and a higher premium.
There are other repercussions that you should be aware of:
If the period between the policy lapsing and getting renewed is significant, you could end up paying a much higher premium or the renewal may be rejected altogether.
If caught driving an uninsured car, you can face strict legal action and end up paying steep fines.
There could be liabilities and consequences resulting from driving an uninsured vehicle, such as risk to your (and others’) life, and injury and damage to your and other vehicles.
You will have to bear all expenses in case of an accident, injury or death, damage, theft etc.
What should you do if your car insurance has expired?
The first step is to contact your insurer. The company may still consider a standard renewal during the car insurance lapse grace period. If not, you will have to apply for a new policy. If you are considering switching insurance providers, compare insurers and select one that offers the best deal at a competitive premium.
While you are at it, sort out the documents and papers of your lapsed policy and keep them handy. You should also include papers, bills, receipts, and other details of any past claims in this documentation. The following vehicle details will also go into this file:
- Your car’s Registration Certificate (RC)
- Pollution Under Control (PUC) certificate
- Your driver’s licence
- Your identity and address proof
With all your papers in order, you can approach the insurer and have them inspect your vehicle. After this inspection, the company will provide you with a policy premium calculation. Make sure you opt for the new cover quickly as they are often valid for a limited time.
An important tip: Remember to check whether your insurer will carry forward the no-claim bonus from your lapsed policy. Insurers often grant this request, so it pays to check.
Most insurers offer a car insurance lapse grace period of about 30 days in case of a lapsed motor insurance policy. Tata AIG, however, provides a car insurance lapse grace period of 90 days, one of the highest in the industry. To make the most of this extra time, renew your insurance as soon as possible after the lapse.
This has three major benefits:
- Your insurance company may waive the vehicle inspection.
- You might be permitted to retain the no claim bonus if it was accrued under the lapsed policy.
- You won’t have to pay a higher premium for the new policy. Remember, the more the delay in renewal of car insurance after it expires, the higher the premium.
A car insurance policy is no longer an option. It is a legal requirement if you wish to drive your car on public roads and ensure your safety and that of others. Renewal of car insurance after due date can have serious consequences, but you can avoid these by ensuring you renew your car insurance on time!
Make sure you #ThinkAhead and opt for Tata AIG’s Auto Secure Private Car Package Policy that offers as many as thirteen add-ons with its car insurance.