Importance of Renewing Car Insurance Policy

Importance of Renewing Car Insurance Policy

Using a private or commercial car without valid car insurance is prohibited in India. Doing so may cause problems for the vehicle owner, both legally and financially. The Motor Vehicles Amendments Act 2019 states that all cars should at least have a third-party insurance policy to be able to move freely on the streets. If a car’s insurance is not renewed within the designated time, it is considered invalid.

Therefore, driving a car with lapsed insurance or no insurance is inviting trouble that may have far-reaching consequences, such as a fine of Rs. 2000 and Rs 4000 for a repeat offence. It will also lead to imprisonment of up to 3 months. Besides, one always runs the risk of facing legal proceedings and financial losses. This brings us to consider the importance of renewing car insurance on time. There are several benefits of timely renewal of a car insurance policy. These benefits not only keep the car safe but also make the car owners’ lives easier. `

Let’s take a look at some important reasons for renewing car insurance:

1. Cover For Damages

If the car is involved in an accident that causes any third-party damages without an insurance cover, they will have to pay for all damages from their pocket. Renewing car insurance on time will save car owners from such hassle and also protect them from financial burdens.

2. NCB Protection

The No-claim Bonus is a premium benefit offered by most insurers as a gesture to appreciate the car owner for not raising any claims in a policy year. It is a discount given to the insured during policy renewal for having a claim-free year. This discount increases by 5% after every claim-free year. The NCB can offer a reduction of up to 50% by the fifth year of the policy. Hence, by not renewing your policy on time, you stand to lose money that you would not have to pay otherwise. However, this benefit is applicable only if the car insurance policy is renewed on time. This means that in order to avail of this discount, there cannot be any lapse in the ongoing policy, as it will nullify the NCB. Hence, to enjoy this benefit and save money, car owners must renew their car insurance policy on time.

3. No Inspection RequiredA car insurance policy that is renewed after a gap leads to a crucial inspection of the vehicle which can take 3-4 days. Further, if any damages are discovered during this inspection, it may lead to the reduction of a car’s insured declared value.

Therefore, getting the car insurance renewed on time saves the car owner from going through a cumbersome procedure and ensures a hassle-free process going forward. It also rids the car owner from any legal obligations and financial implications. So, be sure to be vigilant about the renewal date of your car insurance and drive stress free.

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