Updated on - 30 Dec 2025
Earlier, buying a car insurance policy and its renewal were 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. Even if your insurance expires, the company offers you a grace period, during which no additional charges are levied. But how long is that grace period?
This blog will cover what the grace period is, why it matters and how you can renew your four-wheeler insurance within this timeline.
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. However, you cannot make any claims as the car is considered uninsured during the grace period. It is only after you renew the policy that you can leverage any benefit.
What is the duration of the grace period in car insurance?
There is no grace period after insurance expires under the law. It all depends on the insurance companies. The grace period for the insurance plan may vary from 15 days to 30 days, as per the terms and conditions of the policy issued by the insurance company. The customer must check 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:
- No-claim bonus: By renewing on time, you safeguard your accumulated no-claim bonus. This means that any bonus earned from claim-free years will not be lost, allowing you to enjoy lower premiums in the future.
- Reduced premium rate: Timely renewal helps avoid an increase in your insurance premium. Insurance companies typically offer the same premium rate during the grace period.
- Policy remains active: You cannot make a claim, but the policy remains active. That’s why renewing it on time is important for financial protection at the time of an accident or theft.
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 it expires. 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 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 insurance has to be re-evaluated against the premium charged. In this way, you will pay the best price for the 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 their 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 stress-free drive.
How the car insurance grace period affects your no-claim bonus (NCB)
A no-claim bonus is a reward offered when the insurance holder doesn’t file any claims during the policy year. During the grace period, the NCB in car insurance is still valid. However, you cannot submit a claim as your policy is on hold. Once you renew your four-wheeler insurance, the NCB kicks back in. Just remember to renew your insurance policy within 90 days of expiry.
Importance of maintaining continuous car insurance coverage
Car insurance is not only a legal mandate, but also a step towards a safer future. It offers you financial protection in the event of theft, accident or natural calamity. In case of a lack of coverage, you have to pay for your own and third-party damage liabilities from your pocket. That’s why it is advisable to continue your car insurance coverage, even if you don’t claim it for a long time.
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 car insurance on time. If you need guidance related to different plans, like third-party or comprehensive car insurance plans, fill out the form provided on this page.
FAQs
1. Is there a government law regarding a grace period in car insurance?
No, there is no specific government law mandating a grace period for car insurance. It is provided at the discretion of the insurance company.
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 a used car. The difference in this additional time depends on the terms of the policy and the insurance provider.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. 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.