Lapsed Car Insurance

By Pragativadi News Service On Jun 28, 2021

Monthly beginnings can be both extremely pleasant, because you are done with all the work of the previous month, or it can be extremely chaotic because you have to deal with a lot of bills and payments. Though most people resort to auto-renewal for their regular payments, there are certain payments that we tend to leave out of that loop. One such payment is our car’s insurance premiums. These payments when missed way past their due period are called lapsed payments.

A lapsed car insurance policy can be quite risky when compared to other payments because there are quite a few repercussions that follow. The Government of India has mandated, via the Motor Vehicles Act, 1988 that every vehicle owner should have third-party insurance. Not having one can lead to heavy fines on owners of uninsured vehicles. Read further to know more about lapsed car insurance.

What happens when your car insurance lapses?

If your car insurance lapses, it can be very unfortunate for you, because you may lose out on all the accumulated benefits so far on your policy like a no-claim bonus. Also, you might have to get a new insurance policy, which will lead to vigorous vehicle inspection and can also potentially increase your policy premiums. Other repercussions include that you should be aware of:

● Every insurance provider allows their policyholders a grace period within which they can make their due payments. However, if you make your payment way past your grace period, you could end up paying a higher premium or have your policy renewal rejected altogether.

● You could face strict legal action and the police could impose heavy fines in case of driving an uninsured car.

● If your car happens to be involved in a car or any mishap that results in damage to your car or any third-party property, it could put you in a financial and legal complication.

● Further, you will have to bear all the expenses in case of an accident, injury or death, damage, theft, etc.

What should you do if your car insurance has expired?

The first and foremost thing when your policy has expired is to immediately contact your insurance provider. Some insurance companies consider going through a regular renewal procedure if you contact them within the grace period. Otherwise, you have to get a new policy. And, if you are looking at switching your insurance provider, this is the time for you. Do thorough research on insurance providers and find the one that gives you the best deal with an affordable premium.

Simultaneously, you should keep in place all the necessary documents for a new policy which includes papers of your lapsed policy, bills, receipts, and other details of any past claims. You should also include your car’s Registration Certificate (RC), Pollution Under Control (PUC) certificate, driver’s license, identity, and address proof.

With all the papers in place, you can get your car inspected immediately. After the inspection, your insurance provider will give you the policy premium calculation. With this, you can opt for a new policy immediately. You should make sure to check if your insurance provider has permitted you to carry forward the no-claim bonus from your lapsed policy.

With the infinite number of things needing our attention, it is natural for us to forget certain things. So, it will do well for us to either create effective reminders or go for an auto-renewal option when it comes to payments so as to avoid such avoidable negative consequences.