Car insurance is mandatory in India. So, when you buy a four-wheeler, you simultaneously purchase an insurance policy that provides sufficient coverage to your vehicle.
But if you don’t renew the policy by paying the premium on time, then the chances of car insurance lapse are high. A lapsed insurance is of little use as the insurer will not entertain any of your claim.
Read on to know more about what auto insurance lapse can mean for your vehicle and your finances?
Car insurance lapse: Meaning
Let’s start with the car insurance lapse definition to help you understand the issue.
Like any other insurance policy, a car insurance policy is a contract you enter into with the insurer. The insurer agrees to provide you coverage, and in return, you need to pay the premium to keep the policy alive. The policy is valid for a particular period of time, normally one year. On completion of one year, you need to renew the policy by paying the annual premium. When you miss your premium payment, the insurance policy lapses. As a result, the insurer no longer has an obligation to provide you the coverage, and your car becomes uninsured.
What is the status of your car insurance after lapse?
If your car insurance lapses, you will need to get a new insurance policy. You may also renew the lapsed policy, but the premium that you need to pay for this can be much higher. In some instances, the insurer may also reject your renewal request.
If you have any no-claim bonus associated with your car insurance, you will lose it as well when the insurance lapses. Moreover, driving a car that is not covered by an insurance policy can result in fines and legal action by authorities. You are also liable for all expenses in case your uninsured car meets with an accident, gets damaged, gets stolen, or you injure or kill someone.
How can I obtain car insurance for lapsed policy?
If you notice that your insurance policy has lapsed, the first step is informing the insurer. Most insurance companies have a grace period, and they offer renewal of lapsed policies during that time. Typically, the grace period may range between 3 and 30 days, and you can revive the lapsed policy with or without penalty fees, depending on the terms and conditions of the policy document.
If the insurer doesn’t agree to renew the policy, you will have to apply for a new one. This can be an opportunity to survey the options available in the market and choose the one which works for you.
Make sure that you have the following documents handy as every insurance company will need you to provide the same:
- Registration certificate
- PUC certificate
- Identity proof
- Address proof
- Driving licence
Even if your car insurance lapses, it is not the end of the world. You can contact the insurer or apply for a new car insurance policy to protect your vehicle. A motor insurance policy can go a long way in providing you the peace of mind you deserve as a vehicle owner.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.