Auto insurance: Stay insured while on the move

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Published: December 25, 2015 12:00:01 AM

Insurance renewals for automobiles and two-wheelers continues to be a bugbear for the road transport authorities and the insurance regulator.

Insurance renewals for automobiles and two-wheelers continues to be a bugbear for the road transport authorities and the insurance regulator. A recent report released by the Insurance Regulatory Development Authority of India (Irdai) reveals that over 75% of the two-wheelers operational in India are running without insurance. While new owners buy insurance policy at the time of delivery, many do not bother about checking insurance renewal dates and making timely renewals.

Having third-party insurance for your automobile is mandatory as per law. Here is a close look at how even a small delay in renewal can come back to haunt vehicle owners.

When should you renew your auto insurance policy?

Your automobile insurance must be renewed well in advance before its date of expiry to avoid unsavory situations. For example, a policy taken on January 1, 2015 will be valid till the midnight of December 31, 2015. This means, if you have not renewed your policy on December 31, and meet an accident or incur a loss on January 1, 2016, you cannot claim against your insurance policy.

Also, note that the date of coverage here is not as same as the date of issuance. A policy issued on January 1 may not start the coverage on the same day. Therefore, check the coverage date and not the date of issuance of the policy.

Consequences of failing to renew on time

If you drive your car or a two-wheeler that does not have insurance, you are committing an illegal act. You can be fined by the traffic police and booked for serious traffic right violation. If your vehicle gets stolen or is involved in an accident, you will get no help from the insurance company for any claims if the insurance has not been renewed on time.

Other impacts of a failed insurance renewal

No protection: Your vehicle will longer be protected without an active insurance in place. Even if your insurance expired an hour earlier, you will have to bear all losses if the vehicle gets involved in an accident or theft.

Denial of NCB claim: If you allow your two-wheeler insurance policy to lapse for a period of more than 90 days, you will have to forfeit your No Claim Bonus (NCB). This means when you renew your policy the next time, you will not get the benefits of NCB.

Need for physical inspection: If you renew the policy after the date of expiry, you will need to bring your vehicle to the insurance agent for physical verification. Therefore, if you are travelling or not available in person, you will have to wait and stay uninsured until you can bring your vehicle for physical inspection by the agent.

Ways to renew your insurance policy

Online renewal: To avail online renewal, you will need to log on to your insurer’s website and look for a policy renewal link. Add in your vehicle details along with the policy number, etc. You can choose to include any insurance add-ons as per your need. The online premium calculator will calculate your due premium. Pay the premium online and you will receive your policy documents by email.

Offline renewal: If your insurer mandates physical inspection, you will not be able to renew your policy online. You will need to physically visit your insurance agent, get your vehicle inspected and pay the premium at the insurance company’s office.

It is mandatory for you to have an auto insurance policy in place at all times. So mark your calendar whenever you buy automobile insurance so that you will be alerted about the insurance expiry date every year before the due date.

The insurance regulator has introduced a 3-year term for two-wheeler insurance, which gives you the freedom to relax for at least the next three years. Therefore, if you think that you are likely to forget your due date for insurance renewal for your two-wheeler, you can consider opting for a long term insurance plan.

The writer is CEO, BankBazaar.com

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