By Nitin Kumar

In an ideal scenario, no insurance policies should ever lapse; however, when it comes to motor insurance, the stakes are even higher. Lapsed policies have no room in motor insurance – as it’s illegal to drive without at least a valid third-party motor insurance policy. Certainly, for overall protection, one should opt for a comprehensive policy that covers damage to your own car as well.

Nevertheless, this isn’t to suggest that policies don’t lapse; indeed, they do. Lapses may occur due to oversight in renewing, or some people may opt not to renew their coverage if the vehicle is not in use. In such cases, policyholders often find themselves uncertain about the appropriate steps to remedy the situation. Misinformation is not new to the insurance industry. Several myths surrounding lapsed policies often end up adversely impacting the consumer or deterring their purchase. While it’s important to be aware of prerequisites to renew your policy, it’s equally important to not be plagued by misinformation.

Here, we debunk some myths around lapsed policies.

Myth 1: Vehicle inspection is mandatory for renewal

A common misconception is that a vehicle inspection is mandatory for renewing lapsed car insurance policies. While inspections may be required in certain cases, it’s not a universal requirement. A third-party cover can be renewed without inspection and bought instantly. Certain insurance providers offer the option to renew a lapsed policy without requiring an inspection, provided the policy has lapsed within a specified timeframe, typically ranging from 1-15 days. This flexibility allows room for potential oversights.

Myth 2: Physical inspection is compulsory for comprehensive policy renewal

There is a popular misbelief that comprehensive policies mandatorily demand a physical inspection during renewal. Contrary to this, many insurers leverage technology, allowing policyholders to submit images or videos of their vehicles for assessment, and this assessment is usually done within two hours. With minimal wait times, policyholders can promptly receive their policy once the assessment process is concluded.

This eliminates the need for a physical inspection, streamlining the renewal process. The hassle of a physical examination might deter the renewal altogether. Since comprehensive coverage is recommended for vehicle/owner safety, one can renew the policy easily with a video inspection.

Myth 3: Renewal is unnecessary if the car is not being used

Some vehicle owners may assume that if their car is not in use, renewal is unnecessary. But even when a car is not in operation, maintaining insurance coverage is crucial. Accidents can happen even when a vehicle is stationary, and comprehensive coverage can protect you from non-collision events such as theft, vandalism, fire or natural disasters. Continuous coverage, at least third-party, helps prevent any gaps that might lead to financial burden owing to any kind of damage.

Myth 4: Renewing lapsed policies is time-consuming

A prevalent myth is that renewing lapsed car insurance policies is a time-consuming process. In reality, insurance providers often offer streamlined processes to facilitate quick renewal. Online platforms, dedicated customer service, video inspections and simplified documentation requirements contribute to making the renewal process efficient and accessible.

Myth 5: You must renew your policy from the same insurer

Yet another popular belief, albeit untrue, is that you are obligated to renew a lapsed policy with the same insurer. In truth, policyholders have the freedom to explore options and switch insurers. This flexibility encourages individuals to compare policies online, ensuring they get the best coverage and rates every year for their specific needs along with desired customer support during claims.

Myth 6: Renewing lapsed policy leads to total loss of NCB

There is a fear that renewing a lapsed policy results in a total loss of the No Claim Bonus (NCB). In reality, vehicle owners only lose their NCB if they haven’t renewed the policy for more than 90 days after their previous policy has lapsed. If they renew within 90 days, they can retain their NCB.

Dispelling these common myths surrounding lapsed car insurance is crucial for promoting responsible and informed decision-making among vehicle owners. Car insurance is a fundamental aspect of responsible car ownership, providing financial protection and legal compliance. Leveraging the technological advancements in the insurance industry and being aware of one’s rights and options can make the renewal process smoother and tailored to individual needs.

The author is head, Motor Insurance, Policybazaar.com.