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A valid vehicle insurance is an essential document for Indian car owners. As per the Motor Vehicles Act, any car on public roads has to be mandatorily covered by a third-party cover. Other than being a legal issue, having car insurance has its benefits. It can provide financial assistance during in case there is a damage or an accident. But there are certain factors for which the insurance could turn invalid and your claim could be rejected.
Let’s take a look at the five major reasons why your car insurance can become invalid:
1) False claim
The most obvious reason that can lead to the insurance not being effective is that the claim was fraudulent. If the insurer identifies malice in your claim, one can lose the benefits of vehicle insurance. Even legal trouble may follow.
2) Commercial use of private car
If you are using your personal car for commercial purposes on a regular basis, your car insurance could become invalid and the claim may be denied in the event of an accident. Commercial vehicles fall under a different set of coverage and laws of insurance.
3) Not disclosing vehicle modifications
If you have added new accessories or modified your car during the policy period, you need to inform your insurer before the insurance is renewed. If you do not declare these changes, there’s a good chance that you can lose the benefits of car insurance.
4) Not paying premium on time
If the policyholder does not pay the premium of the car insurance policy on time, then the policy will become invalid. However, most insurance companies in India provide a grace period of 90 days during which one can renew the policy. Once the grace period is gone, you will lose all the accumulated benefits. It is a good practice to pay the insurance premium on time to avoid any unnecessary rejection.
5) Incorrect information
A large number of buyers hide vital details about their vehicle while buying car insurance. This may seem extremely convenient and save money. But it could make the car insurance policy invalid.