Policy Lapsed? Purchase a new policy within 90 days of expiry or lose this benefit

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Updated: Sep 11, 2019 4:01 PM

Motor Vehicle Act 2019: While driving, keep insurance record with you and if it has lapsed, ensure to renew it early especially before the expiry of 90 days.

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Lapsed Insurance Policy: After the amendments in the Motor Vehicle Act 2019, the penalties for traffic violations have increased manifold. For someone not following one or more of the traffic rules, the financial setback could be heavy and may leave one short of a few thousand rupees. For two-wheeler or bike and car owners, driving without valid insurance papers, the penalty has been increased from Rs 1,000 to Rs 2,000. While driving, keep insurance record with you and if it has lapsed, ensure to renew it early, especially before the expiry of 90 days. Driving uninsured vehicle is an offence.

A policy is considered lapsed if the premium is not paid on or before the due date. There is no liability of the insurer once the insurance gets lapsed even by a few days and as per the government rules, one is not allowed to run the vehicle on the road unless the owner has at least the third-party insurance. Still, if the insurance of your car or bike has expired, you can still get the insurance done. The general insurance company cannot deny giving the insurance subject to conditions. “The vehicle can be insured till the validity of the registration of the vehicle,” informs Anup Rau, Managing Director and Chief Executive Officer, Future Generali India Insurance Company.

Pre-insurance inspection

Once the two-wheeler insurance or car insurance policy has lapsed, reviving it may require pre-inspection by the insurer before reviving the policy. “Generally, insurance companies conduct pre-inspection prior to offering the same and approval of pre-inspection is subject to companies internal policy,” says Animesh Das, Head of Product Strategy of ACKO General Insurance.

Renew lapsed two-wheeler insurance

“Insurance company will arrange the Pre-Inspection of the vehicle. And based on satisfactory or acceptable Pre-Inspection report, the vehicle can be accepted for Motor Package Policy Insurance along with the submission of other required documents,” informs Roopam Asthana, CEO and Whole Time Director, Liberty General Insurance. The process will primarily depend on the internal policies of the insurer and at times it can be even revived online. “One can visit the website of the insurance company and schedule a pre-inspection for the same. If the pre-inspection is approved by the company, one can go ahead and purchase the same,” says Das.

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Bike insurance online

One can even go for two-wheeler insurance renewal online. “The vehicle can be insured online and no Inspection is required for Third Party Insurance, while for Own Damage cover the inspection may be required,” says Arun Singh Bhadauria, Head – Motor, Agency, Retail Broking and Motor NTU, Universal Sompo General Insurance.

And, even if you are going for the bike insurance online, it may require pre-inspection of the vehicle. But, for a vehicle with lapsed insurance, will it require one to take the vehicle to the insurance company office or surveying can be done at one’s residence? Here is the process of a few of them:

Future Generali India Insurance: Once you call our call centre and provide details, you will receive a web link on your mobile phone through text message. Using the same on your own mobile phone, one can do self-inspection of the vehicle and submit it online.

ACKO General Insurance: Pre-inspection is at the owner’s residence or the declared location and the same is done on the same day if the manpower is available. The pre-inspection is waived off if the lapsed period is less than 10 days.

Liberty General Insurance: The inspection of a vehicle with lapsed insurance can be done at the insured vehicle’s registered address. It is not required to take the vehicle at the insurer’s nearest branch office.

Universal Sompo General Insurance : The Inspection can be done at residence or place of work of the insured. There is facility for self -inspection also where the Insurance Company can share a link to the customer and Insurer may conduct the Pre-inspection by self and submit to company.

Third party insurance for two wheeler

At the time of reviving a lapsed insurance policy for an uninsured vehicle, you have the option to get either only a third-party (TP) cover or get a comprehensive cover that will include Own Damage (OD) cover also. “One can opt for standalone third-party insurance for the vehicle, which will cover third-party death or injury or property damage. But it is advisable to take a comprehensive insurance policy which will cover the Own Damage risk of the vehicle as well,” suggests Asthana. While going for the OD cover, the age of the vehicle becomes important. “For Own Damage for deciding terms and conditions the age of vehicle is an important criteria,” says Bhadauria.

Insurance NCB – Buy within 90 days

If you already had a comprehensive cover before your policy got lapsed and you also had a no-claim bonus (NCB) accrued on it, it’s better to go for an Own Damage cover while reviving it. Remember, the NCB on your policy is only on the OD portion and not on the 3rd party insurance portion. “If the new policy is purchased within 90 days of expiry, NCB benefits will be extended. Else NCB will lapse,” informs Rau.

Auctioning of uninsured vehicles

In addition to the heavy penalties, driving an uninsured vehicle can get your vehicle impounded and auctioned. In the case of uninsured vehicles, there is a 2018 supreme court ruling to make owners of uninsured vehicles to pay for victim’s compensation even by auctioning of the vehicle. “Rules have to be framed by the respective State Governments. Only some States like Delhi have such rules in effect as on date,” informs Asthana.

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