How to Renew Your Lapsed Car Insurance Policy?

In India, as per the Motor Vehicles Act, 1988, obtaining a car insurance policy is mandatory for all the car owners. If you are caught driving a car without a valid insurance policy, the traffic police will impose hefty fines. However, some people forget to renew their policy on time, resulting in a lapsed car insurance policy. Read the below article to understand the repercussions and after-effects of a lapsed car insurance policy.

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Above-mentioned prices are for a 7-year-old Maruti WAGON R AVANCE LXI (998 CC) registered in Gurgaon and 15 days before expiry of previous policy

What is a Lapse in Car Insurance Policy?

A car insurance policy is an annual contract that needs to be renewed by its due date (and time) as mentioned in the policy document. An insurance lapse occurs when one fails to renew the policy by the due date.

After the car insurance renewal date expires, any type ofcar insurance claimmade isn’t entertained by the insurance company as the policyholder does not hold a valid insurance policy. Moreover, after an insurance lapse, in case of an accident, one has to bear the entire cost from his/her own pocket.

What are the Consequences of Lapse Car Insurance Policy?

There are several negative consequences that you might face if you hold an expired car insurance policy. Here is a list of repercussions that you might face if you have a lapsed policy-

  1. A lapse car insurance policy means you might have to pay revised premium payments to renew and also have to go through the inspection process.
  2. If your lapse car insurance period is quite long, the insurer might reject your policy renewal request. However, in some cases car insurance renewal may be allowed but with some fines & penalties.
  3. A lapse car insurance policy means possible loss of the annual NCB (No Claim Bonus).
  4. Hefty penalties are imposed by traffic police for driving an unsecured car without a valid policy.

Looking at the above-mentioned consequences, it is a good idea to renew your car insurance policy before the expiry date. Furthermore, you can check the below-mentioned steps to renew your expired car insurance policy.

What to do When Your Car Insurance Policy Lapses?

As a first step, quickly check if there is any grace period for car insurance renewal. Sometimes, insurance companies offer a grace period to pay the premium and renew your policy after the due date.

You can connect with your agent or insurer to know the status of your policy without making any further delays. This grace period can range up to 90 days with or without any late charges or penalties.

In case of a lapsed car insurance policy, you should immediately get in touch with your insurer and check on all the available options for car insurance renewal. In some cases, insurers might allow you to renew the policy when the lapse is only a few days, or else they will advise you to apply again for a fresh policy.

While applying for a fresh policy after an insurance lapse, you should check the policy offered by different insurers and compare them based on the features offered and the premium rates. Simultaneously, you must have all your previous policy documents, and details of any past car insurance claims and keep mandatory car documents such as registration certificate (RC), pollution under control (PUC) certificate, and driving license (DL) handy.

Your insurer will assign a surveyor to check the condition of your car. Your insurer will review and decide whether you are entitled to a ‘No-claim Bonus (NCB)’ or not on your fresh policy.Once the survey is done, the premium offered by the company may be valid only for a limited time (typically 24 hours) and you should make a final decision within this period.

How to Avoid Future Lapses in Your Car Insurance Policy?

Online car insurance renewal is the easiest and hassle-free method available. You can start by searching on Google and choosing a plan as per your need and budget. Also, you can visit the official website of Policybazaar Insurance Brokers Limited and compare multiple online car insurance plans offered by different insurers in one place.

Usually, car insurance companies send alerts or reminders through SMS, emails, or even calls to their customers to renew the policy on time. Online car insurance renewal is also advisable as you can get a digitally signed policy immediately. Ideally, you should set reminders on mobile phones or calendars rather than depending on the insurance companies to send renewal alerts.

Final Thoughts

As a car owner, you must have a valid car insurance policy. Also, you must avoid driving with a lapsed or expired car insurance policy as it can put you in hurdles. If you are applying for a fresh car insurance policy, then compare different plans offered by insurers and select a trustworthy & reliable insurance provider.

Written By: PolicyBazaar - Updated: 06 June 2022
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