Overdue bills, lapsed insurance policies, missed EMI payments happen to the best of us, doesn't it? No matter how careful we are, at least once in our lives we may have missed paying our bills before the due date. Now, this could be due to several reasons such as lack of time, or simply laziness. But do you know what are the top reasons due to which car insurance policies lapse? Plain forgetfulness. According to COCOBarometer, our consumer initiative research conducted in February 2019, one of the main reasons our respondents' insurance lapsed because they simply forgot to renew it (28%).
Car insurance renewal due dates are to be taken seriously as claims made even a few minutes of policy lapse will not be honored by the car insurance company. Assume your motor insurance policy expired at 12 midnight on a Friday, and your vehicle collided with another car later that night, so any expenses that were incurred as a result of damages to your car would be borne by you and not by your insurance company. Therefore, it is important to always renew your car insurance policy on time.
We buy motor insurance so that we always have adequate protection, as well as to stay within the law. However, safety is the first thing you lose when your car insurance policy lapses. Minimum third party coverage that every car insurance policyholder is entitled would also be lost. So, if you injure a third party with your vehicle and/or cause damage to their property, you will have to bear all the treatment and/or repair expenses apart from facing legal consequences which might also incur expenses.
The second thing that happens when you forget to renew your car insurance policy is loss of No Claim Bonus (NCB). NCB is the discount given to motor insurance policyholders for not making any claims during the policy tenure. This can go up to 50%. However, if you don’t renew your expired insurance policy within 90 days, the NCB discount that you would have accumulated on your motor insurance policy would be lost forever. If you have accumulated around 40-50% NCB on your policy, the amount lost can be quite significant.
Last, renewing a car insurance policy once it has lapsed can be quite a hassle. Your car insurance provider will send over a surveyor to check your vehicle before your policy is renewed. This process may significantly waste your time and money. Moreover, if you are caught driving your vehicle without a valid car insurance policy you can be penalized for it.
Whether due to your carelessness or some other reason, you find out that your car insurance policy has expired, so what’s the next step that you would take? Contact your motor insurance company immediately. Your car insurance provider will guide you on the next steps that need to be taken for renewal of your car insurance policy. This might even involve sending a surveyor over to inspect your vehicle. While you are in the process of renewing your car insurance policy, make sure you don’t drive the vehicle whose insurance is no longer valid as this can have serious legal and financial consequences if an incident occurs. Whether the distance is short or long, just control the urge to drive your vehicle.
So, how do you ensure that you do not forget to renew your car insurance policy before the due date. Always keep a tab on your incoming text messages and emails. Usually a few weeks before your car insurance policy is about to expire, your insurance company will send you renewal reminders. Ensure that you haven’t blocked your car insurance company from sending you notifications as these will help you remember the car insurance policy due date.
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