Significance of Renewing Your Car Insurance Policy
With so many things on our minds, it is getting increasingly difficult to stay up-to-date with all the reminders. It is still manageable to keep up with due dates of monthly payments such as electricity bills, mobile bills, etc., but annual or multi-year bill payments such as car insurance due dates are tough to remember.
Even after setting a reminder on their mobile phones or getting reminders by the insurance company as SMSs and emails, people tend to forget to renew car insurance. However, that shouldn’t be the case. Read ahead to know the significance of car insurance renewal in a timely manner.
- Legal ramifications
Car insurance is mandatory in India. And an expired policy is considered as having no policy at all. Failing to buy or renew car insurance can lead to legal ramifications such as penalties. And if you happen to injure a pedestrian or damage third-party property with an uninsured car, things can get a lot difficult with respect to legal issues.
- No coverage
An insurance company will not cover you for financial losses faced during a period when you are uninsured. Thus, if you are involved in a car accident during the period when your car insurance policy is inactive, you will have to manage all the financial losses from your own pocket. You will be left without any insurance coverage. That’s why it is suggested to not drive your car at all during the time when it is not insured. However, chances of losses (car theft) are high even from a parking lot! Thus, the best scenario is to renew car insurance before its expiry date and to keep your policy active all the time.
- Losing NCB
Not renewing your car insurance policy can lead to loss of No Claim Bonus (NCB). NCB is a discount that can be availed at the time of car insurance renewal. For it to be applicable, you shouldn’t have raised any claims during the policy period. If you do not raise a claim for a consecutive period of five years, you are eligible for 50% discount on car insurance premium on renewal. You can miss this benefit if there’s a gap of more than ninety days after car insurance expiry and car insurance renewal application. In this case, your accumulated NCB (if any) will reset to zero.
Insurance companies might consider inspecting your car before renewing its insurance if a lot of days have passed after your car insurance policy’s expiry date. This is done to ascertain the condition of the car before insuring it. This step lengthens the car insurance renewal process. Thus, you will have to wait a bit longer to get your car insured and get back behind the steering wheel to drive your car legally on India roads.
- Rise in premium
A significant time gap between policy expiry and policy renewal can hike up your car insurance premium. You might have to pay more premium to insure a car that has been uninsured for a while. This can be due to results of the inspection report, loss of NCB, etc.
Renew Car Insurance Online
Nowadays, you do not have to chase an insurance agent or visit different insurance companies’ branches for car insurance as you can easily renew car insurance online. The ideal way of going about it is to review your insurance policy’s performance. If the insurance company hasn’t lived up to your expectations during the policy period, it is time to switch insurance companies. You can also ascertain your car insurance requirements and make appropriate changes in your plan. For example, you might need a particular Add-on or want to drop one based on your requirements. Make an informed choice, follow rules and stay insured.