Every car insurance plan comes with a fixed tenure of 1-3 years and once the date of expiry is over, the policy loses its legal validity and has to be renewed again. Generally, car insurance plans remain valid for 12 months. According to the rules of the Insurance Regulatory and Development Authority of India(IRDAI), all 4-wheeler owner-drivers are required to renew their car insurance before its expiry date, and for this reason, a grace period of 15-30 days is provided.
If the car insurance is not renewed before the expiry date, it will lead to the end of their contract with the insurer and they will no longer be legally liable to provide the policyholder any coverage, whatsoever. However, many car insurance companies provide their customers with a grace period after the expiry date to renew their car insurance without losing the benefits.
The first thing that happens when your car insurance policy lapses is that your legal contract with the insurer becomes null and void. This calls for the following legal and financial consequences for you:
In case your policy period has expired and you weren’t able to renew it, you need not worry as many car insurance companies provide their policyholders with a period of grace for car insurance renewal which is generally around 30 days or more.
Please note that the grace period is not an extension of the coverage of the lapsed car insurance policy. The car insurance will still be considered expired. The insurance company will reject all claims during this period as the car insurance policy is invalid. The grace period simply gives an additional window to the policyholder for car insurance renewal by paying the required premium.
The window of the grace period generally ranges between 30 to 90 days depending upon the insurer. This grace period is given to the policyholders to renew that car insurance at the earliest to be able to drive legally on the roads as well as retain their policy benefits. Following are some of the benefits of a grace period in a car insurance policy:
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The first thing you should do is to immediately contact your insurer as they will consider the renewal during the grace period. If you wish to apply for a new policy or are considering changing your car insurance company, ensure that you compare several online policies and choose the best car insurance for your vehicle. Additionally, make sure that you check with your insurer if they will be carry-forwarding your no claim bonus in such situations.
Car insurance renewal is as important as buying car insurance. It is critical to renew your car insurance policy before it expires, otherwise, you can face serious consequences. Those who often miss out on renewing their motor insurance before the expiry date can take advantage of the grace period offered by insurers to save their car insurance plans from getting lapsed.
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