Motor Insurance along with third party insurance is mandatory in India when buying any vehicle. It is a must as it provides protection to the vehicle owner against damages and even to any third party involved.
Motor Insurance policies are not a one time buy, but, essentially need to be renewed every year. Most individuals tend to ignore renewing their motor insurance policy on time.
Most insurance companies do not offer a grace period for renewing your policy. This means you have to bear the consequences of untimely renewal.
Here is what you need to do if your insurance policy lapses.
1) Avoid Driving
Avoid using your vehicle when the insurance is not active. In case of damage, during non-insurance period you will liable to pay huge damages on your vehicle as well as third party damages. The consequences could be grave if there is a death involved.
2) Vehicle Inspection
Once your decide on the insurance company you want to go with, you have to get an appointment for vehicle inspection. In case of the lapse of policy by even one day, the vehicle has to be inspected.
Also, if the policy is allowed to lapse for more than 90 days, the accrued benefit of NCB (No Claim Bonus) is also not applicable.
3) Vehicle Survey
Your agent will visit your place and inspect the vehicle to check the vehicle condition. In case of any prior damage, there are chances that your insurance may get rejected or there maybe a higher premium that is applicable. There will also be some charges for the visit even if there is no damage.
4) Buy Insurance immediately
Once the inspection is done, buy the policy immediately as the inspection record is valid for few days depending on the insurance company. Most of the insurers will not allow to buy the policy online in case of lapsed policy.
If the insurer is treating your request as a new one, there are chances that they may not consider pre-existing damage and can charge additionally to cover them.
5) Premium and No claim Bonus
Lapsed policy may attract higher premiums and there are changes that your insurer may reduce or cancel the no claim bonus.
No Claim Bonus (NCB) is the benefit accumulated for not making any claims during the previous policy period.
If you had paid the premium on or before the due date, all these would have not mattered. These days many insurance companies do send reminder messages and e-mails. Do not neglect the payment and pay the premium on time.