Is It Necessary To Renew Car Insurance?

Every car insurance comes with a validity. Both third-party insurance and comprehensive insurance have a validity of a certain period and must be renewed after a fixed period of time. Therefore, if you wonder if it is a must to regularly update or renew my car insurance policy, this article is for you.

Is car insurance renewal required?

The short answer is yes, you must renew car insurance before the expiry date. Scroll down to read more pointers on why you need to renew car insurance:

1. Ensures continual coverage:

The car insurance policy provides financial protection to the vehicle and offers some benefits such as ‘No Claim Bonus’, cashless repair service, zero depreciation cover, etc.  Although, the benefits can be availed only in case of a valid insurance cover. If your insurance is not valid, you will not be able to avail the listed benefits.

2. Compliance with Motor Laws:

The Motor Vehicles Act of 1988 mandates it to have a valid insurance cover for your vehicle in India. Failure to do so can lead to termination of your car insurance policy. As per Indian laws, you cannot operate an uninsured vehicle, as it amounts to a fine of INR 2,000 for the first time, a fine of Rs. 4,000 for subsequent violations, and imprisonment for up to three months.

3. Prevents financial liability:

When you have a valid car insurance, then the damages to the car or even damages to a third party are covered by the insurer. In case you fail to renew your car insurance policy, then the financial burden will have to be borne by you, causing additional financial losses and compensation claims.

4. Preserves ‘No Claim Bonus’ (NCB):

A ‘No Claim Bonus’ (NCB) is a reward that the insurance companies give to car owners for not filing any insurance claims during the previous policy year. Adding on this bonus leads to discounts on premiums or enhanced ‘No Claim Bonus’ percentages. Failing to renew car insurance can cause you to lose your accumulated ‘No Claim Bonus’, even if it remains intact for up to 90 days following the policy's expiration.

5. Ensures hassle-free renewal:

Timely renewal of your car insurance policy ensures a seamless process without the need for vehicle inspections. Neglecting to renew your policy promptly can result in your insurer viewing you as a negligent car owner, potentially triggering a mandatory car inspection. Such inspections may reveal vehicle damages or wear and tear, reducing your car's ‘Insured Declared Value’ (IDV) or leading to higher premium amounts.

Conclusion

We hope this blog answers your question: is it necessary to renew my car insurance? Renew car insurance to avail additional benefits. The failure to do so puts you at financial risk in case of any unfortunate events like an accident or theft. It is also a mandatory requirement under the Motor Vehicles Act of 1988 in India. So, make sure you purchase your four-wheeler insurance on time.