1800 2666
Live Chat
Change Please enter Captcha
x
x

Please enter your details

Please enter the name
+91 Please enter the mobile number
Please select the product
Change Please enter captcha

Live Chat

May I help you?

Begin Chat
expert_blog
 

Break in period in motor insurance renewal

Posted by - Amitabh Jain, Head - Motor Underwriting & Claims
July 08 2014
Have you ever forgotten to pay your utility bills on time or experienced a situation where you missed paying the minimum dues on your Credit Card outstanding? If so, you would be aware of the difficulties that one faces when paying the dues apart from the penalties that apply in terms of monetary as well as disruption of services.

In addition to imposing penalties, financial institutions these days keep a stringent eye on your credit worthiness as well as the repayment pattern of your dues before extending additional credit or providing you mortgage. Institutions consider your credit score which gives a clear track record of one's credit repayment history across all instruments including personal loans, home loans, credit cards etc.

Non-payment or late payment of dues is not limited to loan products but applies to motor insurance as well. In this case, one can face huge amount of inconvenience if the motor insurance policy is not renewed on time. A motor insurance policy is an annual contract which requires renewal every year. Usually the policy is effective from midnight from the day one purchases the policy. In case you miss out on renewing the policy, your policy will break. This means, you will need to purchase a fresh policy from an insurance company who is willing to cover your vehicle again.

While there are instances when one can genuinely forget renewing the motor insurance premium, it is a known fact that several vehicle owners intentionally do not renew the motor insurance policy of their vehicle - a mandatory requirement - to save a few hundred rupees on the premium. In the process, they expose themselves to financial liability in terms of vehicle repair apart from losing accumulated benefits. More importantly, any compensation to the family of the deceased involved in the accident becomes the responsibility of the vehicle owner.

Whatever be the reasons, if you forget renewing your vehicle's motor policy even by a day, the same will lapse and reinstating the policy would mean following the procedure applicable while buying a new motor insurance policy. Having said this, if you are applying for a third party motor insurance cover, the process is not too difficult and an insurance company will offer the policy even after a break in. It must be noted that the insurer will not cover any claim on the vehicle during the period when the vehicle was uninsured. However, if you are opting for a comprehensive policy, which is the more preferred and opted for cover, you will have to go through a slightly longer process.

If a lapsed comprehensive motor insurance policy requires renewal, one needs to fill up a fresh proposal form akin to insuring a new vehicle. Also, it becomes imperative for the insurance company to inspect your vehicle. The inspection is done to document any pre-existing damages to the car. These damages will not be covered by the insurance company in the future even though it may decide to insure the vehicle. One must note that the insurance company may charge a higher premium for a vehicle whose policy has lapsed or may even decide to reject the insurance proposal.

Lapsed policies also lose the benefits that you may have accumulated in terms of NCB (No Claim Bonus). NCB is the discount that you get on the vehicle's premiums for each year that you don't make a claim and can go as high as 50% for a continuous track record of no claim. In case your vehicle remains uninsured for more than 90 days, you shall lose the accrued benefits of NCB. In the process, you lose out on the benefit of transferring NCB to the new vehicle if you were to purchase one. Premium for a new and higher end vehicle will be far more than an old vehicle. As such losing on NCB benefits can lead to lost opportunity in terms of paying lower insurance premium on your new car.

Given the multiple losses and complications towards renewing a lapsed motor insurance policy, it is prudent to renew on time. Nowadays, insurance companies notify customers regarding policy renewal through emails and SMS alerts. With technology at your finger tips, online/ mobile renewal of policy is a simple task. Online renewal also provides the benefit of receiving a digitally signed policy immediately.

Write a review

Related articles

09

April 2014
  • Add on Covers - Get the Best out of Your Motor Insurance policy!

    Motor Insurance as a product has undergone tremendous innovation and customization in the last few years. However, the same cannot be said about customer behavior.
    Posted By - Amitabh Jain
    Read More

19

April 2014
  • Click the button and kick the ignition for Safe Riding

    Two wheelers have always been the most preferred mode of vehicle to fulfill the adventurous needs of a person.
    Posted By - Amitabh Jain
    Read More

05

August 2014
  • Don't let your car insurance lapse

    While there are instances when one can genuinely forget renewing the motor insurance premium, some vehicle owners intentionally do not renew the motor insurance policy
    Posted By - Amitabh Jain
    Read More

22

May 2014
  • Few steps to cut down on your Car Insurance Premium

    Motor insurance premiums are set to rise as third party motor insurance covers have undergone an increase as per regulatory guidelines release recently. Amid a scenario where inflation remains persistently high
    Posted By - Amitabh Jain
    Read More

08

April 2014
  • Add on Covers - Get the Best out of Your Motor Insurance policy!

    There are 3 parts of the healthcare triangle providers of healthcare viz hospitals, consumers of healthcare viz patients and financiers of healthcare viz insurers. Worldwide in various countries there are enough models and research
    Posted By - Amitabh Jain
    Read More

15

April 2014
  • Insure your car against thefts!

    Who would have thought that 3 SUV's would be stolen in a span of five minutes in broad day light in a city like Mumbai! This incident left surprised not only the owners of the vehicles but also the local police personnel who are investigating the incident.
    Posted By - Amitabh Jain
    Read More

12

January 2015
  • Natural or Manmade disaster - Get your vehicle engine covered

    A vehicle is one of the most prized possessions that we purchase during our lifetime. We take utmost care in protecting it from wear & tear and external damages. Though an insurance policy does cover repairs when the vehicle is damaged during an accident
    Posted By - Amitabh Jain
    Read More

25

January 2015
  • Motor insurance outlook for 2015

    2014 was a mixed bag for the automobile industry. Passenger cars as a segment witnessed muted consumer demand. Commercial vehicles that have been registering de-growth since 2011-12 continued to decline at -7% (Apr-Nov'14).
    Posted By - Amitabh Jain
    Read More

09

September 2014
  • What is Consequential Loss

    Monsoon is here and incidents of water logging leading to vehicle breakdown, traffic jams are making news headlines again. Even as the administration and we as citizens make efforts towards a trouble free monsoon, invariably there will be days when we come across such situations in the coming weeks.
    Posted By - Amitabh Jain
    Read More