Insurance of any type lends financial support in a time of need. Similarly, motor insurance is a layer of financial security you can buy to protect your vehicle during unfortunate events. These events could include property damage, injuries or even death. Accidents can not only cause physical damage/injuries, but they can also lead to legal actions against vehicle owners.
That is why it is of utmost importance that you should renew your motor insurance if it expires. There are other crucial aspects that you should be aware of to not let your motor insurance lapse.
Let us take a look at some points to understand why you should renew your expired motor insurance immediately:
• It is necessary:
A lot of emphasis has been put on having a motor insurance policy. First-time vehicle buyers are told that buying a motor insurance policy is mandatory from a legal standpoint. But along with buying, renewing motor insurance is also necessary. Simply buying the policy once is not going to be enough. Renewing the policy ensures coverage for your vehicle.
• Legally required:
Motor insurance is mandated by the law. Hence it is illegal to drive without a valid insurance policy which can cause heavy fines to be levied on the offender. That is why it is very essential to renew your policy if it is expired or about to. In case a police officer stops you, having a valid insurance policy with other documents is a must to avoid legal issues.
• Non-renewal can cause financial trouble:
Not renewing the Third-party Liability component of your motor insurance plan can be damaging if the vehicle is involved in an accident and causes harm to third parties. In such a case, the insurance company will not be liable to pay for the damages, as the policy hasn’t been renewed. This means you will have to manage the third-party liability on your own, which can cost more than the cost of renewing the insurance.
• No coverage during grace period:
Motor insurance providers offer a grace period after the policy expires to take immediate action and renew the plan. However, such a period does not extend the coverage of the policy. The grace period simply declares that the policyholder can renew the policy in that window without a spike in the premium. If your vehicle gets damaged during the grace period and you raise a claim for it, the insurer will reject it on the grounds of an invalid policy, as the policy period has expired.
• Loss of benefits:
If you fail to renew your policy, you will lose the benefits such as the No Claim Bonus (NCB). The NCB is a result of not raising a claim during the policy period, and it can be reduced to zero upon policy lapse. This renewal discount can be as high as 50% if claims haven't been raised for a continuous five-year period. If you do not renew the Comprehensive Plan within 90 days of the policy expiration date, then such non-renewal can lead to an NCB reset.
The above points should give you an idea about the importance of on-time motor insurance renewal. Renewing the plan weeks before the expiry date is also an option. You can take your time to go through the coverage, compare other plans in the market, check out other insurers and then make an informed insurance renewal decision.
If you are looking for buying a motor insurance policy or renewing one, check out various insurance plans with Kotak General Insurance and choose the one that suits your needs.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.