Suppose, it is the weekend and you have planned a road trip with your family. You are on the highway and suddenly, your car breaks down in the middle of the road. But but but! You are all calm because you know you have got a roadside assistance add-on in your Motor Insurance policy. You try to avail it, but the insurance company tells you that your policy has lapsed. This is when it makes you panic that you have forgotten to renew your policy and now, you have crossed the expiry date. You realise that in the absence of an active Motor Insurance policy, the expenses incurred on repair and retrieval of the car from the highway are now to be fully borne by you. This is the kind of financial and mental stress we hope you never have to bear.
In this article, let’s understand the intricacies of Motor Insurance renewal, so that such difficult situations can be aptly avoided.
So, What Is Renewal Of Motor Insurance?
Every insurance policy comes with an expiry date. Once a gets policy expire, you are not eligible for any compensation and you cannot claim anything from the insurer in case of any accident or mishap.
To keep your car protected under the Motor Insurance policy, you need to renew your insurance. In simpler terms, Insurance Renewal is a method to extend the services of your insurance policy before it expires.
Importance Of Motor Insurance Renewal
Here are a few reasons why you should renew your policy by the due date -
Car Insurance Is Legally Mandatory: As per Motor Vehicles Act 1988, every vehicle should have a valid Motor Insurance policy . If you are driving a car with a lapsed policy, then you have to pay the legal penalties.
To Safeguard Your No Claim Bonus: If you have not made any claim in your previous policy tenure and you renew it on time, then you get a No Claim Bonus discount. NCB is a discount you get on your policy’s own damage premium amount at the time of renewal. Post the policy expiry, the grace period to renew the policy will be 90 days. Not renewing a policy within 90 days of the policy expiration means giving up on your NCB.
To Avoid Inspection: Most of the insurers require the vehicle to be inspected post the expiry date even if the policy if the renewal is delayed by a day. At the time of the inspection, any existing damages to the vehicle won’t be covered. The insurer might deny covering the existing damages or they might reject your insurance altogether and ask you to get the vehicle repaired first and then raise a renewal request again.
What Is The Process Of Motor Insurance Renewal?
Generally, you are duly informed by your insurer when your existing insurance policy is about to get expire.
Your insurer will analyse and inform you if any physical inspection of the car is required or not. An inspection will be required if -
the policy is expired,or
any addition has been made to the car which you need to insure, for instance, a newly installed CNG kit
What Happens If You Miss Your Renewal?
Earlier we spoke about why it is important to renew your policy on time. But, what if you miss renewing your policy?
Most insurers send renewal reminders 25 or 30 days before your policy expiry date. These reminders are sent to the registered email ID and mobile number. Many insurers also give you a call to remind you of your renewal. If you somehow miss all these reminders and miss your renewal, your vehicle will be without a cover till the time you renew your policy.
To renew your policy after it has expired, you will have to get your vehicle inspected first. If at the time of inspection, there are any cracks or dents on your vehicle, the insurer may either reject your renewal and ask you to repair your vehicle and re-inspect it or the insurer may refuse to cover the already existing dents/cracks during any future claims.
Here are a few other consequences you may face if your policy expires -
If you renew your vehicle after 90 days of the expiry date, then any accumulated No Claim Bonus will be lost.
If any claim arises during this time duration, the insurer won’t cover your repair expenses. You will have to pay for the same out of your pocket.
If both your own damage and third-party policies are expired and you are caught driving your vehicle without valid insurance, you may also have to face legal repercussions.
Hence, missing out on your renewal is not a good idea.
What Can You Do To Not Miss Your Renewal?
Here are a few helpful tips that you can follow to avoid missing renewal dates -
You can always set a reminder on your smart devices so you never miss a renewal.
Make sure that the email ID and the phone number that you have registered with the insurance company are active. If you change your email ID or your phone number, inform the insurance company and get the same rectified in the policy copy.
Things To Consider Before Renewing An Insurance Policy
Coverage: Ensure that you pick the right Insured Declared Value for your vehicle. Instead of going for any random IDV value, find the second-hand value of your car from a credible source, and ensure you fix your IDV around this value.
Add-ons: Add add-ons as per your needs so you get extra coverage and are protected against any odds in the future.
Type Of Policy: Understand the type of policies available in the market and select a type as per your requirement. For example, if you have a third-party insurance policy and you want better coverage, then you can go for a comprehensive policy or a stand-alone own-damage policy.
Claims And Customer Support: Make sure the insurance company has a proper claim and customer support system in place so that you do not have to run from pillar to post when any problem related to the policy or a claim arises. You can always change your insurance company at the time of renewal if you are not satisfied with their services.
Premium: Before finalising a policy, make sure you compare the quotes online so that you can get the best policy with adequate coverage and premium that fits your pocket.
Renew the policy on time: To avoid any issues in the future, make sure that you renew your policy on or before the policy expiry date.
No Claim Bonus: If you have not made any claims in your policy period, you will be eligible for a No Claim Bonus. Ensure that you enter the correct NCB while renewing your policy.
A lot of people avoid renewing their policies as they believe they will never get to use them. They do not give enough importance to a motor insurance policy until they face a crisis themselves. This policy plays a huge role in safeguarding you and your car against financial and legal liabilities. The way you set reminders to not miss your friends’ birthdays, it is equally important to remind yourself to renew your policy before expiration. As it is said, precaution is always better than cure.
These are some of the add-ons you can buy with your car insurance -
1️⃣Zero Depreciation Cover
Over time, vehicles depreciate and lose value. If you make a claim under your motor insurance policy, the insurer will deduct the depreciation value and then pay you the claim amount. However, when you choose a zero-depreciation add-on, they won't count depreciation when paying your claim, so you'll get a higher payout. Zero depreciation usually only applies to vehicles up to 5 years old. While some insurers let you claim unlimited times, others limit the number of times you can make a claim under this add-on. For instance, many insurance companies let you make a claim only twice.
2️⃣Engine Protector Cover
There's no denying that the engine is the most expensive part of the car, and any damage to it will cost you quite a bit. But, unfortunately, comprehensive policies do not cover any mechanical damages caused to the engine. With an engine protector add-on, you can protect the engine from damage or loss caused by issues like water logging, oil spills, electrical and mechanical breakdowns, etc. It may also cover the cost of replacing the engine or its parts. The engine protector cover is available for vehicles up to 5 years old.
3️⃣Roadside Assistance Cover
A roadside assistance policy can get you on-the-road assistance in case you get stuck. This can be invaluable if you find yourself stranded late at night, far from home, without any other means of aid. Whenever you find yourself in this situation, all you have to do is call the insurance company's toll-free number.
These are some of the services provided under roadside assistance:
- Changing a flat tyre
- Minor on-site repair
- Car towing
- Fuel delivery
- Arrangement of replacement of car keys
- Battery jump-start, etc
4️⃣Return To Invoice Cover
As soon as the car leaves the showroom, its value goes down. The insurance company covers your car for its insured declared value (IDV). If your car is damaged in an accident and can't be repaired or if it's stolen, the insurance company will pay you the IDV, which is the depreciated value of your car, not the invoice value that you paid at the time of purchase.
This is where an invoice cover comes in handy. If your car is totalled, constructively totalled, or stolen, the return to invoice add-on allows you to get the invoice value, i.e., the initial price of your car when you purchased it. With this money, you can replace your car with a new one. Please note that you'll be able to get an invoice cover only if your car is less than 3 to 5 years old.
5️⃣Personal Accident Cover
The personal accident cover will provide you with a safety net against any permanent partial disability, permanent total disability, or death caused due to an accident. The IRDAI mandates that you need a personal accident cover of at least Rs 15 lakhs when buying motor insurance. In the event of a claim, the compensation will be paid as per the terms and conditions of the policy.
Personal accident cover for passengers: Personal accident insurance will protect you from liabilities if something unfortunate happens to your passengers while you are driving your car. You can purchase a cover of up to Rs 2 lakhs for passengers.
Generally, comprehensive motor insurance doesn't cover the expenses associated with consumables like nuts-bolts, grease, engine oil, brake oil, washers, screws, bearings, oil filters, etc. With the consumables cover, the insurance company will cover these expenses, so you need not worry about paying anything extra. The consumables cover is available only for vehicles up to 5 years old.
7️⃣Tyre Protect Cover
Comprehensive policies don't cover tyre damage unless it's caused at the time of the accident. Should the tyre get damaged because of other circumstances, you'll be liable for the repair costs. However, with tyre protect cover, any damage to the tyre will be covered by your insurer.
1. When Should I Renew My Car Insurance Policy?
You should always renew your insurance a few weeks before it expires. If you miss your renewal, you'll have to get your car inspected before the insurance can be renewed. Please note that your premium will be higher too.
2. Is It Possible To Get A Grace Period For My Current Car Insurance Policy?
Car insurance doesn't have a grace period. If you fail to renew your policy, your car needs to undergo inspection. However, the No Claim Bonus benefit has a 90-day grace period. Basically, if you have accumulated a No Claim Bonus on your policy and you renew within 90 days of expiration, you will be eligible for it. Otherwise, you'll lose it.
3. When It Comes To Renewing A Policy, What Factors Affect The Premium?
Your car insurance renewal premium depends on -
- Age of your car
- No Claim Bonus discount
- Fuel type
- Make and model
- Add-on covers
4. Is It Possible To Renew My Policy Online?
Your policy can be renewed online. You can either go to your current insurer's website and enter your details, or you can look for other insurers by visiting their relevant websites or those of web aggregators, enter your details, and continue with the renewal.
5. What Are The List Of Documents Required For Policy Renewal?
Online renewals don't require you to submit any documents, but you'll have to keep them at hand in case you need to enter the details. Here's a list of documents you'll need:
- RC copy (to enter the correct details of the vehicle)
- ID proof (to enter the same name as per the government records)
- Address details
6. How Can I Renew My Car Insurance Online?
When you visit your current insurance company's website, and enter your policy number or registered mobile number, you'll see the renewal details on the following screen. You can cross-check the details and continue with your renewal.
If you're looking to renew your policy with someone other than your current insurer, then you can go to the desired insurer's website, a broker's website, or a web aggregator's website, enter your details and go ahead with the renewal.
7. What Should You Do If Your Car Insurance Policy Expires?
To reinstate your expired policy, follow these simple steps:
- Contact your insurance company right away.
- Have your car inspected.
- After the inspection is done and the renewal gets approved by the insurer, you can go ahead with the renewal.
- Keep your vehicle off the road until your insurance is renewed.
8. Do Premiums Go Up After A Claim?
You get a No Claim Bonus discount if you don't make any claims in the policy year and these No Claim Bonus discounts help lower your premium by a certain percentage. If you make a claim, your No Claim Bonus comes down to zero. In the event that you renew your insurance after a claim, this no-claim bonus discount won't be applied.
9. What's The Deadline For Renewing Car Insurance After Expiry?
You should renew your policy as soon as it expires. In case your car meets with an accident or gets damaged during this time, you'll be left to pay for the repair expenses out of your own pocket. If in any case, you aren’t able to do so, ensure you renew your car insurance within 90 days of its expiration. This will help you keep your accumulated no-claim bonus intact.
10. What Happens If I Don't Renew My Car Insurance On Time?
If you don’t renew your car insurance on time, it will need to undergo inspection. If your car is damaged at the time of inspection, you'll have to fix it first, then get it reinspected. If you delay your renewal more than 90 days after expiration, you may also lose your no-claim bonus. And, you may also have to pay an extra premium.
11. What Is The Fine For Expired Car Insurance In India?
If you are caught driving your car without insurance or expired insurance on the road, you'll have to pay a fine of Rs 2000 and/or face imprisonment for up to 3 months. In case you get caught the second time, you'll have to pay a fine of Rs 4,000 and/or be sent to jail for up to 3 months. In case your comprehensive policy expires but you have an active third-party policy, you won't have to pay a fine. This is because a third-party policy is a must-have as per the Motor Vehicles Act.