26 July 2017

RSS Feed

Has your car insurance policy lapsed? Here are the Consequences and Ways to Deal with It

E-mail Print PDF

There could be many reasons of not renewing a car insurance policy but the reality is that now you are stuck. A lapsed car insurance policy is equal to no insurance policy.

Do you know the consequences of a lapsed car insurance policy?

Your car insurance policy states its validity and to ensure its effectiveness, it is necessary to renew the policy before the expiry date. If you miss renewing your insurance policy, even by a day, your car insurance policy will have a break. Though, you can renew your lapsed car insurance policy, the procedure would be different

1) In case of third-party insurance policy

A third-party insurance covers losses or damages caused to the other vehicle or pedestrians in an accident involving your vehicle. As per Indian law, it is compulsory to have a third-party insurance and therefore, if you let it lapse, you can’t take your car on the road. However, a break in policy renewal doesn’t impact this cover as the insurer can’t reject your policy renewal application. Note, the insurer will not cover losses or damages happen before the policy renewal.

2) In case of own-damage or comprehensive car insurance policy

If you approach the insurer for the renewal of your lapsed car insurance policy, the insurer may ask for a vehicle inspection before the issuance of a new policy. It is done in order to document any pre-existing damage that the insurer will not cover. The insurer may also revoke your NCB. Moreover, if your vehicle has too many dents or damages, the car insurance company can reject your policy as well.

Now when you know the consequences of a lapsed car insurance policy, the next pertinent question is—how to deal with it?

Your car insurer may give you some leeway and renew your lapsed policy like the usual manner if only a few days have been passed since the policy renewal date. However, if several weeks have been passed, the insurer may treat your policy application as a new case.

There are two ways through which you can renew your car insurance policy=

  1. 1. Go Online

It is a fast and easy way to renew your car insurance policy as all you have to do is log on to the insurer’s website and fill in important details, like previous years’ policy information, vehicle registration number, add-ons, etc. The insurer will review your policy application and renew your policy after the completion of the procedure. The soft copy will be emailed to you.

Unlike traditional methods wherein the car insurer may ask for a vehicle inspection before the policy renewal, the online mode reinstates your lapsed car insurance policy without vehicle inspection.

In case several weeks have been passed, the insurer may also send a surveyor for the physical inspection of the vehicle. Usually, 2- 3 days might go in the survey and the insurer can also charge a nominal premium for this. Once the survey is over, the insurer may issue the policy.

As the car insurance survey may take a few days, some insurance companies have launched a feature that allows policyholders to self-inspect their vehicle via mobile for the insurance purpose. Once you pay the policy renewal fee, you can record and upload a video of your car which will be later inspected by the insurer and a car insurance policy is issued within a few hours. It helps in curtailing the inspection time and allows you to purchase the car insurance policy instantly.

  1. 2. Approach your Agent

You can contact your insurance agent if you have purchased your car insurance policy from them. The agent will approach the insurance company on your behalf and complete the rest of the process.

Conclusion

Given the series of financial complications that you may have to suffer due to non-renewal of your car insurance policy, it is important to renew your policy on time. Further, when it is easy to buy and renew the policy online, you should not take any chance by driving an uninsured vehicle. Moreover, a lapsed car insurance policy is equivalent to no policy, so do yourself a favor and renew your car insurance without fail.

Last Updated ( Thursday, 06 July 2017 17:57 )  



Get the Flash Player to see this player.

Follow SEI

Facebook Twitter Linkedin Youtube RSS Feed
Small Enterprise India Newsletters

Ask GURU

Take Our Online PollVoice your opinion
What do you expect from the StartUp India Action Plan?

Stock Market