A Guide to Renew an Expired Car Insurance Policy

Car insurance policies offer coverage for a specific time period, which usually is 1-year but you can opt for a multi-year policy as well.  The policy pays for claims arising during this period only, and once the policy term is over, you can no longer file a claim until the policy is renewed. When a vehicle insurance policy is not renewed before the due date for insurance renewal then it is lapsed by the insurer.  It means that you will have to bear any damage or accidental repair expenses from your pocket until you get it renewed. And if you renew if within time then you can avail the No-claim-bonus and other benefits. However, if you fail to renew it before the expiry date, you will have to start all over again. It is like buying a new car insurance policy. Do not fret; here is a quick guide to help you understand what’s at stake and what can be done to rectify it:

Car Insurance Policy Purchase and Renewal Guide In Case of Expiry In case your car insurance policy expires, the steps you can follow are given below:

  • Get in touch with your car insurance provider as you get to know that your policy has expired
  • At the time of renewal you can choose another car insurance provider for enhanced covered or renew the existing one as per your requirements
  • You can opt for additional features and benefits in your car insurance policy at the time of renewal
  • If your policy is expired, the insurer would fix an appointment to get your vehicle surveyed again
  • Once the vehicle inspection is completed you can buy a new car insurance policy once the vehicle survey is completed

Why an Expired Car Insurance Policy can be Troublesome?

As per the Motor Vehicle Act, it is mandatory to have a minimum of third-party vehicle insurance in India. If you continue to drive your vehicle without getting its car insurance renewed then it can be a problem both legal and financially. In case of an accident or any collision if it is found that you were driving vehicle with an expired car insurance policy, then it will be a punishable offense.

Moreover, it increases the chances of financial losses if there is an accident or any other road emergency. For any loss or damage you will have to pay on your own. Other disadvantages of an expired car insurance policy are as follows:

  • Legal violation- As mentioned above it is legally mandatory to have a valid motor insurance policy for all the vehicles plying on the roads. In case you forget to renew your car insurance policy before its expiry date then your car insurance cover also becomes invalid. And you might have to face legal consequences if it is caught with an invalid car insurance policy.
  • Loss of coverage-Once your car insurance policy expires, your policy coverage benefits also stop, which can lead to huge financial troubles in case of an accident or a third-party liability, as the insurance company will not pay for any of the losses or damages
  • You Lose No-claim-Bonus-No-claim-bonus is the discount given by the motor insurance provider to the policyholder for all the claim free years. The policyholder can avail it at the time of car insurance renewal and it is transferable while switching the insurer. To avail the NCB it is important that the insurance policy for car is renewed timely and it is only valid on a comprehensive car insurance policy. Almost every car insurance policy offers No-claim-discount for not filing a claim during the policy term, and it can range from 5% to 50%. You can avail this at the time of policy renewal and if you miss renewing it before the expiry date then you will lose your NCB, which increases with the number of claim free years.
Number of Claim Free Years NCB ( in percentage)
1 20
2 25
3 35
4 45
5 50
  • Higher Car Insurance Premiums-If you renew your car insurance policy that has expired, you will have to pay a higher premium. Once the policy is lapsed and is not renewed within the stipulated time, you lose the no-claim-bonus that you have earned for not filing a claim and you also lose other discounts that may apply to continuing the policy that has now lapsed. Both these factors result in higher premiums. Thus, it may not work in your favor to miss the policy renewal either by mistake or deliberately as it will mean shelling out extra premium at the time of renewing it a fresh.

Keep these Papers Handy When Dealing with an Expired Car Insurance Policy

While renewing an expired car insurance policy, make sure that you keep these documents handy to ensure a hassle-free purchase. Mentioned below are some of the important documents that you should keep accessible:

  • Vehicle Registration Certificate (RC)
  • A copy of the expired car insurance policy
  • RTO address associated with the insured car
  • Car details including car model number, city and date of registration, insurer name, etc.

Expert Tips on Cutting down Your Insurance Cost at the Time of Renewing an Expired Car Insurance Policy

The premium should not be the only factor to consider while renewing an expired car insurance policy. However, to buy an insurance policy for your car at an economical price, simply read on to the below-mentioned tips that will help in reducing the car insurance premium:

  • Applicants with a safe driving record in the past years are likely to get a discount on the premium from their motor insurer
  • Buying motor insurance from the same general insurance company may also help in earning some discounts.
  • However, while renewing an expired car insurance policy, do not just settle for the current car insurance company. Check out other motor insurers if they are offering a better insurance policy for car at a lower premium. Always compare various car insurance plans online and check the details.
  • Experienced drivers are also likely to get a better car insurance rate form their insurers

Renewing Expired Car Insurance Policy Online Vs. Offline Comparison

While most of the people already prefer to buy a car insurance online, but there is a certain population that still continues to buy motor insurance offline. Here are the pros and cons of buying a car insurance online as well as offline:

  • Easy To Compare Different Car Insurance Plans- One can easily check online which insurance company is offering better car insurance rates, and which plan is providing better coverage. Select a plan that meets most of the requirements and is customizable. While purchasing offline from an agent, there is only one option to buy it from that particular insurance company.
  • Less Documentation: The major benefit of buying a car insurance policy online is that it involves less paperwork. Once a car insurance policy is selected the payment can also be done online. It offers more convenience to the customer as he/she can deal directly with the authorized insurance personnel.
  • Seamless Online Car Insurance Renewal- Online car insurance renewal ensures timely updates. It will ensure that the insurance policy for car doesn’t get lapsed.
  • Transparency- Car insurance online purchase ensures transparency as one can visit the insurer’s website and download the insurance documents. On the contrary, when purchasing a policy offline, there are more chances of being manipulated by an agent.
  • Making an Informed Purchase- While comparing car insurance online, one can check the incurred claim ratio of different insurer’s. When buying motor insurance offline, one is dependent on the agent to provide the true statistics about the insurers incurred claim ratio. Moreover, the authenticity of an agent is always questionable.  
  • The Cost Factor- Most of the insurance companies offer discounts on their online purchase. Once can earn up to 30 percent discount online in comparison to offline purchase that involves the commission charged by an agent.
  • Flexibility to make Changes- If the proposer wants to make any changes in the car insurance policy wordings; it can be done by simply filling up the endorsement form which is available on the insurer’s website. Fill the endorsement form and give it to the insurer and get instant sanction for your request.
  • Easy to Access- Customers can easily access the insurer’s site online anytime and anywhere. They have round-the-clock customer service to address their customers. And this is something which is not possible with an offline purchase.

In a Nutshell

As you can see timely renewal of a car insurance policy can save from a lot of hassles in future. Therefore, try and renew your policy before it gets lapsed to avail the discounts that are available. If your policy has lapsed once, do not worry, just make sure that you do not repeat the same mistake the next time and save yourself from any legal or financial setbacks should there be an emergency like a collision, accident or third-party injuries from your vehicle.

Written By: PolicyBazaar - Updated: 11 August 2020
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