How to renew your lapsed motor insurance policy

By: |
March 30, 2021 4:01 PM

Renewing an active insurance policy, or even buying an insurance policy online, is easier than renewing a lapsed insurance policy. The option of reviving a policy starts getting limited, as the number of days the renewal has been delayed increases.

car, auto loan, car loan, vehicle insurance renewal, auto insurance renewal, motor insurance renewal, bike insurance, vehicle insurance, auto insurance, General Insurance, Insurance, car insurance, auto insuranceBased on the type of the policy, it could either lapse automatically or allow the policyholder a window for revival.

In the past, a driver could get away just by paying a fine of Rs 1,000, if caught driving around with a lapsed policy. However, with the new Motor Vehicle Act 2019, they are needed to shell out Rs 2,000 for the first time and the fine doubles for repeating that offence. There can be many reasons why you might have missed the renewal date of your motor insurance policy, but driving around without renewing the policy could cost you dearly.

An insurance policy lapses when the policyholder stops paying the premiums on the due date and also during the grace period. Based on the type of the policy, it could either lapse automatically or allow the policyholder a window for revival.

Having said that, renewing an active insurance policy, or even buying an insurance policy online, is easier than renewing a lapsed insurance policy. The option of reviving a policy starts getting limited, as the number of days the renewal has been delayed increases. Nevertheless, there are ways to revive a lapsed motor insurance policy.

Renewal options

To start with, you can either approach an intermediary or an agent, insuring online, or visit the company office, to revive your lapsed cover.

If you want to carry forward your previous No Claim Bonus (NCB), you will have to renew your insurance cover within 90 days of expiry. Delaying and going beyond 90 days, will not only mean loss of the no claim bonus but also could result in paying higher premiums.

Renewing third-party and comprehensive policy

The mandatory third-party insurance plans protect the policyholder from paying a hefty fine in case of an accident. A third-party insurance policy pays for the losses and injury or damage to the third party caused by the insured vehicle in case of an accident. Note that, it does not cover anything related to the policyholder’s own vehicle. A comprehensive policy, however, includes damage to the policy holder’s own vehicle along with the third-party cover. Hence, the premiums for third-party insurance are low when compared to comprehensive motor insurance policies.

Opting for a new comprehensive insurance cover is usually time-consuming as insurers ask and inspect details about the vehicle’s condition before approving a policy. However, all these can be avoided while reviving a lapsed policy, if the policyholder makes the request within 90 days of the lapse of the previous policy. Online insurers, as well as, web aggregators generally approve for the cover without an inspection if the request is made within 90 days.

After the gap of 90 days, if a policyholder tries to revive the policy, the policy might also get rejected by the insurer. For instance, while reviving a policy, few minor damages in a vehicle are usually ignored, but a vehicle with more than 4 minor dents or a crack in the windshield, could get rejected.

Earlier, most insurers insisted on a physical inspection, however, now with the pandemic and digital penetration, insurers also have the option of a digital self-inspection system for physical verification, wherein the policyholder have to take pictures or videos of the vehicle using the insurer’s app.

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