What is the Grace Period After Your Car Insurance Coverage Expires?

Earlier buying an insurance policy and its renewal was really a very cumbersome process. With the advent of technology, the whole procedure has become so much simpler. In fact, the majority of service providers offer the option of completing the entire buying and renewal of policies online to their customers.

While the insurance companies have their own websites where you can get this done, another option is to use third-party aggregator sites too. You can primarily use these sites to compare the various benefits offered by the insurance companies at the time of buying or renewing their car insurance policy.

What is the Grace Period in Car Insurance?

The grace period in car insurance is the additional time your insurance provider allows you to make the premium payment after the due date has passed. This is to ensure the policy doesn’t lapse. Benefits such as no-claim bonus (NCB) are available during this period. However, you cannot make any claims as the car is considered uninsured during the grace period.

What is The Duration of the Grace Period in Car Insurance?

There is no grace period after insurance expires under law. It all depends on the insurance companies. The grace period for the insurance plan may vary from 3 days to 30 days as per the terms and conditions of the policy issued by the insurance company. The customer must check about the car insurance grace period at the time of buying the insurance policy.

Benefits of Renewing Car Insurance Within The Grace Period

There are several advantages of renewing your four-wheeler insurance within the grace period-

1. You can keep the no-claim bonus or NCB.
2. The risk of an increased rate of premium is reduced.
3. You can enjoy the coverage without a break.

What Are The Consequences Of Not Renewing The Car Insurance Before Expiry?

Under the Motor Vehicles Act, driving cars on Indian roads without third-party car insurance is illegal. Such action may invite the imposition of penalties and fines. It is advisable to renew your car insurance before its expiry date. Besides the legal drawbacks, there are several other disadvantages of not renewing your car insurance policy on time-

1. Penalties by the Insurance Provider: The practice usually followed by the insurance companies is that they will charge some sort of a late payment fee if the delay is reasonable, say, within one month of the car insurance grace period.

2. Cancellation of Policy: If the delay in renewing the car insurance is excessive, then the possibility is that the insurance company may cancel the policy itself. After the cancellation of the car insurance policy by the insurance company, no claims from the car owner will be acceptable. This situation may leave the car owner exposed to legal and financial liabilities. The car owner should also not drive the car until the renewal process is complete.

3. Loss of No Claim Bonus (NCB) : Many insurance companies offer no-claim bonus car insurance for safe driving. This is a discount offered to the customers at the time of renewal of the car insurance policy. But this bonus or discount is available to the car owner only up to ninety days from the date of expiry of your car insurance.

4. Car Inspection: Some insurance companies may conduct an inspection of the vehicle if the renewal is not made within the grace period. Many insurance companies offer relaxation from such stipulations. However, it is mandatory to carry out an inspection of the vehicle if the insurance renewal is not done within ninety days of the date of expiry.

5. No Third-Party Coverage:  If the car owner is involved in any car accident after the expiry of the four-wheeler insurance but before its renewal, then there is a possibility of the owner being entangled in third-party legal hassles.

Pre-Renewal Checklist

Remember to go through this checklist at the time of policy renewal.

• The Insured Declared Value or IDV in car insurancehas to be re-evaluated against the premium charged. In this way, you will pay the best price for benefits enjoyed through the insurance coverage.
• The claims ratio of the current insurance company must be checked at the time of renewal.
• The car owner must ensure that service centres with the cashless facility are available near his locality.
• The car owner must check the discounts available for the payments he or she has to make over and above the claims made to the insurance company.

Please don’t wait for the grace period but get your renewal of the insurance policy done before the expiry date and enjoy a burdenless drive.

FAQs

1. Is there a government law regarding a grace period in car insurance?

Driving an uninsured car is an offense and can lead to penalties by traffic authorities. A grace period in four-wheeler insurance is provided by the insurer, during which the policyholder is allowed to renew the policy without any fines.

2. Will I lose my no-claim bonus (NCB) if my car insurance policy expires?

The policyholder can continue to benefit from the NCB during the grace period given by the insurance provider, beyond which all the benefits are lost.

3. Can I switch my insurance provider if my car insurance has expired?

A car owner can buy insurance coverage from one insurance company and renew with another. If the owner has not been satisfied with the benefits and services of the insurance company, the best time for the review of that policy is just before the expiry of the current insurance policy.

4. What is the grace period for an insurance policy on a new and used car?

There is no difference between the grace period for a new and used car. The difference in this additional time depends upon the terms of the policy and insurance provider.

Conclusion

Understanding and using the grace period for car insurance renewal is important to maintain continued coverage for your vehicle. Timely renewal protects you from legal and financial consequences. While a grace period is a last resort that provides a safety net in case of missed deadlines, renewing the policy long before its expiration date is advisable. Stay proactive and renew your four-wheeler insurance on time.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.