A car insurance policy is the best and mandatory way to ensure the safety of the car. Once the insurance policy lapses, you cannot claim the benefits enrolled in the policy. Renewing policy is like giving your car and your worries a new life.
There are some illustrations where vehicle owners genuinely forget to renew their policy, but some deliberately avoid renewing their car insurance policy to save few pennies of the premiums.
Not renewing your car insurance policy may result in severe trouble. If you do so, you may put yourself into financial liabilities in terms of any repairs that may be required or, more vitally; any compensation to the deceased’s family involved in an accident. Moreover, you also do not become liable for benefits such as no claim bonus (NCB).
Now you might be thinking, what is NCB? NCB is the discount that you get on your premiums when you renew your car policy. If you don’t renew your car insurance policy for more than 90 days, you can lose out on the benefit of NCB.
Furthermore, NCB (no claim bonus) is not transferable to the new vehicle even if you purchase the new one. Also, the premium of the new vehicle you buy will be more than the older one. Thus, by losing the NCB, you will end up paying a higher premium for your new car.
If the car insurance gets lapsed, you cannot renew the policy at that time. By doing so, you could have to face some penalties or fines. During this period, it is better to buy a new policy rather than renewing the same.
Reviving a lapsed policy also takes time and effort to follow the procedure applicable while buying a new car insurance policy. If you apply for a third-party motor insurance cover, the process is not too burdensome, and an insurance provider will offer the policy even after the break. However, a comprehensive policy with more preferred cover will take you through a slightly lengthy process as here new proposal form needs to be filled up.
What is the next step after the car insurance policy has lapsed?
Generally, there is also a grace period provided after the policy lapses, during which the car insurance policy can be renewed without losing any of the benefits. Here we will guide you with some steps you should go through once the policy lapses.
- If the grace period is over, you should apply for a new car insurance policy as soon as possible. Firstly check various policies for the features they offer and compare the premium cost to pick the one that best suits your budget.
- Once you have finalized the policy, the insurance company will inspect your car to check for any pre-existing damages.
- On the basis of the survey report, the insurance company will decide if you are eligible to claim NCB or not.
When it’s about renewing your car insurance policy, it is best not to wait till the end of the renewal date. Always keep the date in mind and renew the policy at least a week or two before it lapses.