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Car insurers generally offer a grace period after policy expiry. (Representative Image)
All of us know the importance of having car insurance. It protects us from unnecessary expenses that arise from uncertainties, theft, fire and accidents. But do you renew your car insurance policy on time? It is also equally important before the completion of the policy period. According to Indian law, having a valid car insurance is a mandatory requirement of driving a car at any public place in the country. It is one of the important documents for every car owner in India. Let us try to understand the importance of on-time renewal of car insurance policy.
Legal issues
Driving with an expired car insurance plan is illegal in India. It creates a legal problem. To avoid these unwanted issues there must be a valid insurance policy with you when you drive a car on the road.
Higher premium
If your car insurance policy lapses due to non-renewal, buying a new plan becomes costlier than the existing sum. This is completely avoidable if you’re attentive enough to pay regular premiums and renew the policy on time.
No claim bonus
The no-claim bonus (NCB) is the reward from the insurance provider to the policyholder for not raising a claim during the policy tenure. The NCB is a discount ranging between 20%-50% depending on the policy year and is given to the insured while renewing a policy. If you fail to renew your policy on time, you will lose out on the discount.
No coverage risk
If you haven’t renewed your car insurance on time, your claim will be rejected by the insurance provider in case of a mishap. Car insurers generally offer a grace period after policy expiry. However, such a period does not extend the coverage. So, regular renewal of car insurance means peace of mind.
Car inspection
A car insurer may decide to inspect the vehicle before renewing its insurance policy if it has not been renewed for a long time. This is to ascertain the current condition of the vehicle and to note any pre-existing damages. Also, the premium payable might rise after car inspection.