Renew expired car insurance policy today! You may have seen this message often. Sometimes, even before the date of expiry. But why is it so important to renew your car insurance policy? Are the consequences so dire that you cannot even delay it by one day? And if, after all those reminders, you were not able to renew it on time, what should be your next step? You will find the answer to all of these questions in this blog. Read on to learn more.
Consequences of expired car insurance policy
Your car insurance policy is the most important thing for your car. It does not only protect you financially but also legally. Therefore, an expired car insurance policy can have serious consequences. Let us discuss them in detail.
Legal trouble: In India, a third-party car insurance policy is mandatory for all. You cannot even take your car out of the showroom without an insurance policy in hand. That is the law. And if you break the law, you will face serious penalties. If you forget to renew your expired car insurance, you can face a fine of Rs. 2,000 or imprisonment for up to three months. The fine will increase if you are caught for a second time.
Loss of cover: An expired car insurance policy offers no coverage or claim. Therefore, if you get into an accident with expired insurance, you will receive no coverage from the insurance provider. If you try to file a claim, it will be rejected. Similarly, in case of damages due to natural or man-made calamities, such as floods, riots, or fire, the insurance company would provide compensation. You will have to pay for your loss out of your pocket.
Loss of no-claim bonus: No claim bonus is an additional benefit offered by insurance companies to encourage you to be a good driver. The percentage of the bonus increases with every claimless year, ultimately reaching 50%. The bonus stops rising after reaching 50%. To maintain your NCB, you must renew your insurance on time. Therefore, if your insurance policy expires, you will lose your no-claim bonus.
Long renewal process: If your car insurance policy has expired for some time, the renewal process can take much longer than usual. If you renew before expiry, the process may take mere minutes. However, once expired, the insurance company may want to conduct an inspection. The inspection process depends on your convenience and the availability of an inspector.
Chances of inspection: If a lot of time has passed since your car insurance policy has expired, the insurance company may want to inspect your car before renewing the policy. The inspection can lead to increased costs. This is because it costs the company money to conduct it. If your vehicle is not in good shape, the insurance company will naturally want to increase the premium.
Higher car insurance premium: As mentioned in the previous point, if your car is not in a good shape, the insurance company can increase your premium upon renewal. Another reason for higher premiums can be the loss of a no-claim bonus. No claim bonus is deducted from your premium. Without it, your premium amount will increase.
What to do if your car insurance expires?
Forgot to renew expired car insurance? It’s okay. As humans, it is natural to make mistakes. Now, the key is to determine what can be done to make up for the mistake.
Here are steps you should take if you miss renewing your car insurance policy.
Contact your insurer: The first and foremost step is to contact your agent as soon as you realize you have missed the renewal date. Your agent can help you determine the way forward since they are trained to deal with such cases. They may help you work out something with the insurance company and save you from paying any fines.
Don’t drive your car: This is the most essential step to take. Do not drive your car for any reason until your insurance is renewed. Driving just means putting yourself at more risk. Even if your vehicle gets damaged by no fault of your own, your insurance will not cover it. Not to mention the legal trouble you will face for driving without insurance. If you do not have any other means of transportation, try contacting your insurer for an online policy renewal.
Get a new policy: If your car insurance policy is cancelled by the insurance company, the only other option you can take is to purchase a new one. Choose the type of policy you want to buy, buy add-ons to enhance your coverage, and purchase your policy.
Some other things you can do upon the expiry of your car insurance are as follows:-
- You can choose a new policy. If you had a third-party and standalone car insurance policy previously, you could choose to get a comprehensive one this time. Compare policies online to make the best decision.
- You can also choose a new insurance provider if you want.
- Once you have talked to the insurance company and selected your policy, go ahead and prepare your documents for renewal.
- Your insurance company may want to inspect the vehicle before renewing your car insurance policy. The inspection is done to check for damages. In this case, try to get an early appointment.
- If you renew expired car insurance immediately after its expiry, you may not face any serious consequences.
- Most insurance providers offer a grace period for renewal. The period may be between 30 to 90 days. However, this does not mean your car is insured. It merely means you can renew your policy without suffering extreme consequences.
Expired car insurance can have serious consequences, as discussed in this blog. It can also cause a huge blow to your finances if your car is damaged without insurance coverage. Therefore, renewing your car insurance policy is undoubtedly one of the most important things to do. By any chance if you have missed the renewal, renew expired car insurance as soon as possible.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.
