What Happens If My Car Insurance Policy Lapses?

Car Insurance Policy is the best and mandatory way to ensure your beloved vehicle. Renewing premium is like giving a new life to your car and your worries. There are instances where vehicle owners genuinely forget to renew their car insurance but sometimes they deliberately avoid renewing their car insurance just to save few pennies of the premiums.

Not renewing your policy or ignoring it may result in a serious trouble. Here, you put yourself to financial liabilities in terms of any repairs that may be required or more importantly; any compensation to the family of the deceased involved in an accident becomes the responsibility of the vehicle owner. Moreover, you lose out the benefits such as no claim bonus (NCB). NCB is the discount that you get on your premiums while renewing your car policy. If you don’t renew your car insurance for more than 90 Days you can lose out NCB. Furthermore, this NCB is not transferable to the new vehicle either, if you were to purchase one. The premium for a new and higher end vehicle will be more than the older one. Losing NCB will end up paying a higher premium for your new car.

Reinstating a lapsed policy also takes time and effort as it would mean following the procedure applicable while buying a new motor insurance policy. Having said this, if you are applying for a third party motor insurance cover, the process is not too difficult and an insurance company will offer the policy even after a break. However, a comprehensive policy with more preferred cover will take you through a slightly longer process. Here fresh proposal form needs to be filled up. It is imperative for your insurer to inspect your vehicle to document any pre-existing damages to the car. These damages will not be covered by the insurance company in the future even though it may decide to insure the vehicle. One must note that the insurance company may charge a higher premium for a vehicle whose policy has lapsed or may even decide to reject the insurance proposal.

Given the multiple losses from letting your car insurance lapsed and complications in renewing a lapsed policy, it is prudent to renew on time. Nowadays, insured can easily set reminders or alerts for their insurance renewal online. Moreover, insurance companies are also notifying customers regarding policy renewal through emails and SMS alerts. With technology at your fingertips, online/mobile renewal of policy is a simple task. Online renewal also provides the benefit of receiving a digitally signed policy immediately.