Categories: Agency News

Why You Should Never Let Your Car Insurance Lapse?

Car insurance coverage guarantees protection against personal accident expenses, legal liabilities, and even third-party damages. It also offers security against any natural or manmade disaster. You must always carry a copy of your current motor insurance policy when driving, according to the Motor Vehicles Act of 1988. 

You may likely forget to renew your car insurance, but did you know that if it is missing or lapsed, it is considered a crime with severe punishment. The authorities have become more strict in recent years, highlighting the importance of adequate auto insurance coverage. 

Read this article to know why you should never let your car insurance lapse.

What Does ‘Car Insurance Lapse’ Mean?

A car insurance lapse is the time frame during which an active policy does not cover your car. In India, the Motor Vehicles Act of 1988 makes auto insurance mandatory. Operating a car without a valid insurance policy is not only against the law but also financially dangerous. 

On the other hand, many vehicle owners frequently forget to renew their insurance, letting it expire. There are significant repercussions to allowing your auto insurance to lapse beyond simply paying fines. There are several reasons why this might occur, including: 

  • Not paying the premiums on your auto insurance
  • Allowing your insurance to expire without renewing it
  • Changing insurance and allowing time to pass between the end of your old policy and the beginning of your new one

A lapse in auto insurance can be costly, mainly if you are involved in an accident. In addition to paying out-of-pocket for any damages or injuries, you can also be hit with hefty traffic fines. You might also get sued, resulting in financial penalties or lost future earnings. The length of the lapse, the insurance provider, and the insurance regulations in your state all influence the repercussions of a car insurance lapse.

Legal Consequences of Driving Without Insurance

You will face penalties if you are found to be operating a vehicle without valid auto insurance. 

  • By Indian legislation, there will be a two-month fine and a three-month jail sentence. The previous provision levied a fine of Rs. 1,000 for driving without insurance.
  • For the second offence, the legislation may provide a maximum three-month jail sentence and a fine of Rs. 4,000. As a result, there will be a fee for every car without insurance. Many people are caught daily without policies and are heavily fined by the police.

Financial Implications of Letting Your Insurance Lapse

You are liable for all costs if you have an accident while driving with a lapsed insurance policy. This covers the expense of fixing your car and any harm done to other people’s cars or property. You’ll have to pay for these expenses and medical bills out of pocket. 

Due to the increased risk that expired policies pose to insurance companies, renewing a policy may result in a higher premium. Inspect your car before continuing your policy and forego the trouble and expense. Extended durations may also result in policy renewal delays.

The Risk of Losing Your No Claim Bonus (NCB)

The NCB in car insurance is a discount insurance providers provide yearly when there are no claims. It lowers your premium expenses. You risk losing your NCB, which translates to higher premiums when you renew your insurance if it lapses for more than ninety-nine days.

To protect or transfer your NCB when switching providers, inform your new insurer about your existing NCB status. Most insurers will allow you to transfer your bonus, but you may need to provide documentation from your previous insurer confirming your NCB entitlement. 

Car Theft or Damage Without Insurance Coverage

There may be legal issues if there are third-party damages and no insurance. A lawsuit could be brought against you by the victim of property loss or bodily injury. If you don’t have insurance, you’ll have to pay for compensation and legal costs, which can be expensive.

You need insurance for unpredictable events like heavy monsoon damage, theft and natural calamities. You need comprehensive coverage for your car to avoid the risk of losing protection against unpredictable events.

Difficulty in Getting Insurance After a Lapse

There are limited alternatives for renewing a policy. You might only be able to restore a policy after undergoing extra procedures once it has expired. Certain insurance companies could insist you buy a new policy rather than renew your current one. 

There can be waiting periods before the new insurance takes effect, increased premiums, and fewer options for coverage. If the insurance company does not trust you, regain it with safe driving courses and proving safe driving history,

How to Prevent a Car Insurance Lapse?

A car insurance lapse is costly and undesirable. Prevent car insurance from lapsing by implementing these habits:

  • Make a Note: Put the renewal date in your calendar or your phone’s reminder system. Remember to watch for reminders that insurance companies send via email or SMS.
  • Options for Auto-Renewals: With auto-renewal services, certain insurers immediately deduct the premium from your account. This guarantees the perpetual validity of your coverage.
  • Early Reprieves: You can renew your coverage up to 30 days before its expiration date with most insurers. In addition to preventing lapses, renewing early allows you to evaluate several policies and choose the best fit.
  • Install Insurance Apps: Many insurance companies offer apps facilitating easy policy renewal and frequent notifications. You can streamline the renewal process by using these apps.

Policyholders must renew their insurance plans on time to prevent a lapse in coverage, considering the significant legal, financial and practical risks involved. Some insurance providers include a grace period during which you can continue the policy even after it expires. It is usually best to renew the policy before its expiration date to avoid issues. Ensure your car insurance is renewed on schedule, preferably before the current policy expires to avoid repercussions.

Published by

Recent Posts

World Champion Boxer Announces Retirement at Age 36

Image Name: Kell Brook retires from boxing Image Credit: The Times & The Sunday Times…

2 months ago

ABC expands ‘The View’ with new series ‘The Weekend View

Image Name: The Weekend View Set Image Credit: Deadline ABC, yet another age-old legacy, has…

2 months ago

Biden Cancels Italy Trip to Meet Pope Due to LA Wildfires

Image Name: Joe Biden With Pope Francis Image Credit: MSN It seems that a twist…

2 months ago

Justin Trudeau Resigns as Canada’s Prime Minister

Image Name: Canada PM Trudeau Image Credit: The Hindu In a surprising announcement, the Prime…

2 months ago

It’s Official: Selena Gomez Is in Her Bridal Style Era

Image Name: Selena Gomez Is in Her Bridal Style Image Credit: MSN Selena Gomez steps…

2 months ago

John Cena kicks off WWE farewell tour by announcing his first match

Image Name: John Cena to enter 2025 Royal Rumble Image Credit: USA Today WWE superstar…

2 months ago