Grace Period in Bike Insurance
- Author :
- TATA AIG Team
- Published on :
In India, it is mandatory for two-wheelers, four-wheelers, and any other class of vehicles to get the appropriate vehicle insurance. This is because the government of India makes it mandatory to care for the traffic provisions and the life, safety, and wellness of fellow riders/ drivers on the road. If you own a two-wheeler, it is crucial to get at least a third-party bike insurance policy per the rules under the Motor Vehicles Act, 1961.
There are three types of insurance for 2-wheelers — third-party insurance, comprehensive insurance, and standalone own damage cover. Both types of insurance for 2-wheelers provide insurance coverage.
In a third-party bike insurance policy, only other riders, their vehicle, and their property get covered with insurance. In a standalone bike insurance policy, the owner-rider of the two-wheeler, their two-wheeler, and their property get protected from damage caused by themselves or a third party. The comprehensive bike insurance policy provides cover against third-party liabilities, as well as own damage.
But you get this financial protection only when the two-wheeler insurance remains active, which is for 1-5 years. On the date of expiry of the insurance policy, you have to carry out a bike insurance renewal. If you forget, you get a grace period for renewal of bike insurance. Read on to find out how long the bike insurance renewal grace period lasts and what to do if this period expires.
What is the Grace Period for Renewal of Bike Insurance?
To avail of the features of any type of insurance, including insurance for 2-wheelers, you have to pay a specific sum of money called premiums. You pay these premiums in periodic instalments every month, three months, six months, or year, depending on the insurer.
Usually, for a bike insurance policy, premiums are payable every month/ year or in a one-time lump sum paid at the start of every bike insurance policy. Each year, to do the bike insurance renewal, you have to pay the premiums, after which you unlock the benefits under the insurance policy. If you miss any premium payments, the bike insurance policy will automatically lapse, and you will lose out on the benefits. However, insurance providers keep a backup for their customers in the form of a grace period.
A grace period is an extended timeline where you can pay the missed premiums and complete your bike insurance renewal. For instance, if you face a medical crisis, lose your job, get stuck in debt, or come under any other financial obligation, it is understandable that you would not be able to renew your insurance policy and might require a reasonable timeframe to pay the premiums. Insurance providers understand these reasons and have a no questions asked grace window where you can make up the missed premium payments.
What Happens if You Miss the Grace Period for Renewal of Bike Insurance?
If you don’t stick to making timely premium payments, there are various financial consequences under the bike insurance policy. The benefits you can lose include:
- Loss of two-wheeler insurance coverage:
One of the foremost benefits you lose on the expiry of the grace period is the two-wheeler insurance cover provided under the bike insurance policy. So, in the unfortunate eventuality of damage to your bike, exposure to natural/ man-made disasters, damage to a third party, or any other loss/ theft/ injury of any kind, you would not receive the insurance payout. The insurance coverage is in the form of a payout, cashless claim settlement, or reimbursement.
- Loss of no-claim bonus benefits:
No-claim bonus or NCB is a discount benefit you get on insurance premiums for every claim-free year. Every year you do not make a bike insurance claim, the insurer views it as adherence to travel rules. As a bonus, you get discounts on the premiums payable on the next cycle of policy renewal. In fact, for up to five claim-free years, you can get up to a 50% discount from an insurer. However, after the expiry of the grace period for renewal of bike insurance, you lose the NCBs as well.
Bike inspection from scratch:
Before you can get the benefits of the bike insurance policy, your insurer sends a bike insurance inspector to inspect every part of your bike. The inspection is to confirm the bike’s existence and the damage it was exposed to at the time of an insurance claim. However, once the grace period expires, you might have to go through the time-consuming process of inspection and document verification again.
Can You Do a Bike Insurance Renewal After the Grace Period Expires?
Can You Do a Bike Insurance Renewal After the Grace Period Expires?
The grace period for a bike insurance policy usually lasts between 15 to 30 days. During this period, and even a few weeks preceding it, your insurance provider will remind you of the upcoming expiry date and the consequent bike insurance renewal you need to carry out. Once you hit the grace period, your insurance company will remind you of the pending premium payment and might inquire about the reason for the non-payment.
Usually, insurers do not extend the window for payment clearance after the expiry of the grace period unless it is an exceptional circumstance. For instance, the grace period of many life insurance policies was extended by some insurers during the COVID-19 pandemic. Once the grace period for two-wheeler insurance expires, your insurance policy will automatically lapse, and you will lose out on the benefits. If you make an insurance claim after the grace period expires, the insurer has the right to reject your insurance claim.
What Can You Do if The Bike Insurance Policy Grace Period Expires?
Once the bike insurance policy grace period expires, some insurers offer a revival period during which you can revive or reinstate the insurance policy. The reinstatement/ revival period often lasts up to two years, after which the insurer considers the insurance policy lapsed. You might have to pay the entire pending premiums and any penalty fees to revive and reinstate the bike insurance policy. However, most insurers require you to get a new bike insurance policy and start the application process from scratch.
The worst part of not renewing your bike insurance is the threat to your life. You should ideally do it before the grace period. However, if you are in the grace period for two-wheeler insurance, you can either renew your existing policy or get a new one from Tata AIG. You can also compare two-wheeler insurance on our website to find the one that aligns with your needs and budget.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.