Still Driving Your Car with a Lapsed Insurance Policy? Here’s What You Should Know
Still Driving Your Car with a Lapsed Insurance Policy? Here’s What You Should Know
Published on March 29, 2021. EST READ TIME: 4 minutes
The Motor Vehicles Act mandates that every car owner should have a third-party car insurance policy to be eligible to drive on Indian roads. So, by default, when you buy a vehicle, you take a plan, be it a third-party car insurance policy or a comprehensive car insurance policy. This policy could be valid for a year or more. No matter the policy timeframe, most insurance providers will remind you to renew the policy before it expires. Some renew it promptly, while others may choose to ignore the reminders and forget to renew it altogether. Therefore, it is of no surprise when they are slapped with a heavy challan the moment they are caught driving with a lapsed policy. But, even if the policy gets lapsed, one can still renew it. Here is a guide to follow when stuck with a lapsed policy.
Understanding the concept of a lapsed policy
The car insurance policy that you purchase is issued for a specified period. At the very least, the policy is issued for one year. You are also allowed to purchase long-term policies like those that are issued for two or three years. Once the duration of your policy has passed, your policy is considered lapsed. You are not offered any protection under a lapsed policy. This means that if a car meets an accident when the car insurance renewal was not done, you will not be able to make any claims against it. Similarly, it also means that your vehicle does not meet the minimum third-party insurance policy requirement, which is a legal mandate.
Disadvantages of a lapsed policy
If your policy has expired, you will be required to get your car inspected before you can renew your car insurance online. If 30 days have passed since expiry, you may have to pay late fees. Other disadvantages of a lapsed car insurance policy are:
You are not driving a car legally and will get fined: As mentioned above, driving a car without a valid insurance policy is breaking the law. If you are caught driving a car without valid insurance, you will be issued a challan of INR 2,000.
You lose the own damage cover: If you drive a car without valid insurance and meet an accident, you will have no protection. All the bills to repair your car will now have to be borne out of your pocket. There is no insurance company to share the burden with you.
You lose your no-claim bonus: If you have been a careful driver, you must have accumulated a significant amount of No-Claim Bonus. If 90 days have passed since your car insurance expiry, you will lose that accumulated NCB and will have to start again.
You risk financial loss: Did you know that third-party insurance is mandatory for everyone because it is used to cover the damages caused to other people if your vehicle is involved in an accident. If your policy has expired and the courts order you to pay compensation for someone hurt in an accident involving your vehicle, you will have to pay that money from your pocket.
Understanding car insurance policy renewal
Car insurance renewal must ideally be done before your current policy has expired. The best approach is to get your insurance renewed at least a month before it has expired. Renewal of car insurance online is quite easy. Simply visit the insurance provider’s website and choose the car-renewal tab if opting for the same policy. You can also explore other policies by the insurance provider and compare them with your current policy before making a choice.
What to do if your policy has lapsed?
If your car insurance policy has lapsed, you must immediately do the following things.
1. Do not drive your car! As told earlier, driving a car with an expired policy will land you in serious trouble.
2. Search for and choose a plan for car insurance renewal. Visit the insurance company website and select an insurance plan.
3. Schedule a visit for car inspection and get it inspected. Keep your car papers ready when the inspection officer visits you.
4. Upon approval, make the payment promptly and get the policy issued.
Conclusion
A lapsed car insurance policy means potential for legal and financial issues. While it is advisable to renew the policy before it lapses, in case you fail to do so, simply follow the above-mentioned steps and get it renewed ASAP!
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.
This blog has been written by:
S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry
A veteran in insurance industry, S. Gopalakrishnan is a name to reckon with in the field of reinsurance; he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on the latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.
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