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Letting your car insurance lapse will cost you a lot, and not just money

According to a report by the General Insurance Council of India, over 60 per cent of vehicles in our country are uninsured. This is even a bigger issue considering that over 5 lakh accidents are reported in India every year with over 1.5 lakh deaths

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IMPACT FEATURE
November 30, 2020 | Updated 14:31 IST
Letting your car insurance lapse will cost you a lot, and not just money
Photo credit: Bajaj Allianz General Insurance

If you're someone who made the decision to spend a few lakh rupees to get the car of your choice, you'd have also made the decision to spend a few thousand rupees to ensure the car doesn't push you into spending a bomb on it in case of any accident. Yes, we are talking about insuring your car. Good you did it!

According to a report by the General Insurance Council of India (GIC), over 60 per cent of vehicles in our country are uninsured. This huge percentage of uninsured vehicles is even a bigger issue considering that over 5 lakh accidents get reported in India every year with over 1.5 lakh deaths[1]. Moreover, as per the latest figures released by the National Crime Records Bureau, almost 2.5 lakh vehicles are stolen in India each year out of which only around 25 per cent are recovered[2]. Having comprehensive car insurance can protect you from financial implications if you are at the receiving end of these statistics.

Insurance is Mandatory in India

However, taking car insurance is not just the sensible thing to do, it is also mandatory from a legal point of view. As per the Motor Vehicle Act of 1988, it is mandatory for every vehicle to be covered under an insurance before it is on the road, whether it is a comprehensive cover or a third-party insurance. The former would cover your vehicle against damages due to natural calamities, fire, accident and theft, and from legal and financial liabilities towards a third party. The latter would protect you only from liabilities towards a third party.

Not just that, the Certificate of Insurance is one of the documents you need to have in your vehicle, along with a valid driving license, pollution certificate and the Registration Certificate of the car. You could be penalised by the traffic police, or face other legal complications, if you fail to produce any of these documents.

Why you should renew your car insurance on time

One of the most important benefits of a comprehensive car insurance policy is the personal accident add-on cover that it offers. You must have your insurance up to date, and renew your policy on time to enjoy a whole lot of other benefits as well. Most profitable among them is the no-claim bonus - a discount on premium in case you don't make any claims during the year. This makes your car insurance cheaper with every passing year. To claim this bonus, it is crucial that you do not let your car insurance lapse. Other than this, here are a few points you should be aware of about the implications of letting your car insurance lapse.

A no-brainer first, you could get in trouble with the law if you miss out on car insurance renewal before the expiry of your policy. A lapsed insurance is as good as no insurance. Also, you could be the best driver in the world, but accidents may happen because of others who are careless. In such a situation, a car insurance that has lapsed won't help you, because, at the cost of repeating, what it essentially means is that you don't have an insurance cover. The same is true in case your car is stolen, or it gets damaged in a natural calamity or a fire, or even excessive heat during the summer. You get no financial support if you don't renew your insurance.

If you miss the due date of renewal of your car insurance policy, you get a 30-day grace period. During the grace period, you can renew the insurance without having to pay any late fees or penalties. However, if you do not renew your insurance even during this time, you not only lose the no-claim bonus, you may also have to face the hassle of subjecting your vehicle for an inspection and verification. This is a lot of hassle as opposed to having the luxury of renewing your car insurance in just a few clicks, from the comfort of your home, if you do it on time.

The sensible thing to do is to set a reminder for a couple of weeks before the due date of renewal. This will help you have enough time to assess your existing policy, compare it with the new options available and renew the insurance after making an informed choice. You can also use the car insurance premium calculator on Bajaj Allianz General Insurance website to get an estimate of the premium you will have to pay to renew your policy.

Some companies offer additional benefits to those who are looking to insure their cars. Bajaj Allianz General Insurance, for instance, lets you include add-on benefits such as zero-depreciation cover, breakdown assistance and many other features, allowing you to customize your policy as per your requirements. Their extensive online car insurance policy also offers benefits like coverage of personal baggage theft/damage, paperless-digital insurance applications and processing, online claims, spot services and much more.

No matter which insurer you choose and the add-ons you decide to go with, the most crucial thing is that you must not let your car insurance lapse. It is just a matter of a few clicks anyway, and these few clicks can save you a lot of time, money and inconvenience. Plus, it is always better to be safe than sorry. You may follow all the rules and take all precautions, but accidents by nature are unpredictable. An insurance cover protects you from situations beyond your control. Of course, it won't protect you from an injury, but it removes the monetary losses and brings a sense of security when you are out on the roads.

Do check if your car insurance is still valid, or if it is going to lapse soon!


Source:

[1] https://www.gicouncil.in

[2] https://ncrb.gov.in/sites/default/files/CII%202019%20Volume%203.pdf

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