What Happens If Car Insurance Lapses in India?

It’s common for us to miss the due date of our utility bill payments. But what if you forget to renew your car insurance on time? In that case, your car insurance policy will lapse and you cannot claim later for the losses or any unfortunate incidents associated with the 4-wheeler! Many could fail to renew on time due to traveling, hectic work schedule, etc. So, if your policy has lapsed on account of non-renewal, you may face some complications as discussed in this article. But we will also tell you how to overcome such complications. Let’s read this post further to know all.

What are the Consequences of Car Insurance Lapses?

You will face the following consequences if your car insurance lapses –

1. The more you delay in renewal, the higher will be the premium due to fines and penalties
2. You may have to apply again for a fresh policy, and this option will be available to you only if the new insurer approves your car survey or inspection
3. You need to pay a higher premium on a fresh car insurance policy
4. You will lose the accumulated annual no claim bonus
5. You might also get into legal trouble due to driving an unsecured car without a valid policy
6. You can also lose your chance of car insurance renewal if the lapse period is high
7. After the car insurance lapses, you need to bear its entire cost from your pocket in case a risk arises.

Things to Do In Case You Have Not Renewed Your Car Insurance Yet

Insurance companies offer you a grace period of 30-90 days to renew the car insurance if you don’t pay on the scheduled renewal date. So make the most of this extra time and renew your insurance immediately. Nowadays, renewing car insurance is quite simple and it can be done online directly. You just need to follow the steps shown below –

1. Visit the insurance company official website
2. Select ‘Car Insurance’
3. Choose the option of ‘Renewal’
4. Login to your account using your policy number

Note – Online car insurance renewal is available to you only if you get a digitally signed policy.

If the grace period expires and you haven’t renewed your lapsed car insurance, you can apply for a new policy, as it is the best way to secure your car when your policy lapses. Once you have finalized the policy, the insurance company will conduct a survey or inspection of your car to check whether there are any pre-existing damages or not. Based on the survey report, the company will decide if you are still eligible for no claim bonus.

What Will Happen to Your Car Insurance in Case of Your Death?

If the sole insured dies during the policy term, the car insurance policy will not immediately lapse. The policy may remain valid for three months from the date of the death or until the policy expires, whichever is earlier. During this period, the insured’s legal heir or the personal representative can transfer the policy in their name or obtain new car insurance. If the legal heir or the personal representative applies for transfer, they need to send a duly filled application for the same accompanied by the following –

1. Death Certificate in respect of the insured
2. Proof showing the title of the insured’s car
3. Original policy