What if your Car Insurance lapses?

What if your Car Insurance lapses?

As you must know, when you purchase a car it is crucial to invest in car insurance as well. This is not it! You have to renew your car insurance every year to continue your policy, else, it will lapse. If your car insurance policy lapses, you will be left without insurance coverage and exposed to financial dangers. Until you renew or purchase new insurance, the insurer will no longer cover you. Here are some of the dangers of having an expired car insurance policy:

No Coverage

A lapsed insurance would be the same as having no coverage. You also won’t be able to file any car insurance claims if you don’t have any coverage. This signifies that if your car is damaged by fire, riots, or floods, the insurance provider is not responsible for compensating you for your losses. You will be responsible for all your expenses in case of any mishap. Hence, it’s important to renew your car insurance policy promptly to ensure continuous coverage.

Legal Issues

If you’re caught driving a car with expired insurance coverage, you might face serious legal issues. A monetary penalty may be imposed for such an offense. Repeat offenses can result in harsh sanctions. In the worst-case scenario, you may end up in prison. Therefore, if you notice that your car’s insurance policy has expired, quickly renew it and do not drive your vehicle on public roads with expired coverage.

Long Renewal Process

It may take longer to renew your insurance if it has lapsed for an extended period. However, through online insurance platforms like Policybazaar, it can be renewed in minutes. If expired insurance requires an inspection, the policy cannot be renewed immediately without going through the inspection procedure. Depending on the availability of the inspectors and your timetable, the inspection procedure can take some time.

Loss of No Claim Bonus (NCB)

If the car insurance policy is not renewed within 90 days (grace period) of its original expiration date, your outlay to NCB may be forfeited. A loss of this magnitude can result in a significant financial outlay, especially if you have an NCB discount of 50%. If you do not file a claim throughout the insurance period, you will be eligible for the NCB discount. It accumulates for up to five years of claim-free years. It might be as high as 50% if no claims are filed for five years in a row. After five years, the discount is locked in at 50% until a claim is filed. When a claim is filed, the counter is reset to zero.

Chances of Inspection

If the insurer believes that your car has been uninsured for a long time, they can demand to check the vehicle before renewing the coverage. Such inspection can result in a price increase because one, the corporation incurs expenditures as a result of the inspection procedure, which is added to the premium. Two, if it is discovered that the vehicle is in poor condition and poses a danger.

How to renew your car policy after lapsing?

When your car insurance coverage expires, you must contact your insurer right away. If you have exceeded your grace period, the insurance company will request you to apply for new coverage. However, if the gap isn’t too large, they might let you renew the coverage. To purchase new insurance, you will have to repeat the complete procedure of purchasing a new policy. The insurance provider will not allow you to use any of your policy’s benefits during your lapsed time.

It’s unlikely that you’ll be able to renew your previous insurance when it expires. As a result, be ready to purchase new insurance. Here’s what you should do:

  • Apply for a new policy right away.
  • When applying for a new policy, evaluate car insurance policies offered by several insurance providers and choose the one with the lowest price.
  • Several documents, like previous policy papers, claims and certificates relating to your car are required throughout the new application process.
  • When you apply for new coverage, the insurer will assess your vehicle to see whether there are any pre-existing problems.
  • The insurer will ask you to complete the premium payment for the new policy after the inspection and your car insurance will be activated.

So, now you know what happens if your car insurance coverage lapses. Hence, you must take every precaution to ensure that your policy is renewed timely. Keep an eye on the renewal date and set a reminder on your phone as well. To buy and renew policies online from the comfort of your own home, you can visit Policybazaar.com and eliminate the need to visit physical stores.

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