Renew motor insurance before lapse or else there will be huge loss

The auto hit Abhishek’s parked car at the red light. Abhishek got angry but less on the auto driver and more on himself. Couldn’t find the time to renew the car insurance and the insurance lapsed, postponing it. Now Abhishek will have to pay the repairing expenses from his own pocket. That is why it is important to always renew car insurance on time.

Expired insurance will attract penalty

Do you know what will happen if the traffic police is caught driving a car without insurance? The same penalty has been fixed under the Motor Vehicles Act 2019 for both car and two wheeler vehicles. If caught for the first time, the fine can range from Rs 2000 to three months in jail or both. If caught for the second time, the fine can be double ie 4000 rupees and three months in jail or both.

Disadvantages of a lapsed policy

In case of a lapsed policy, the owner of the vehicle has to indemnify the third party damages in addition to the damage caused to the car. Third party ie TP insurance has become mandatory from September 2018. Apart from the driver and the insurance company in the accident, which is a third party, that is, if the cover of damage caused to someone else’s vehicle is covered in the third party. A cover of Rs 7.5 lakh for third party vehicle or injury caused to them is available in third party cover.

If the insurance has lapsed, then no expenses will be paid. Also, it will also be punishable. In addition to fines, there may also be a jail term. Damage to the vehicle due to natural calamities like hurricane or earthquake will also not be covered. Even if the car is stolen, you will not be able to take advantage of the insurance. After the loan of the car or two wheeler is over, it has to be hypothecated and registered in its name. But the vehicle with lapsed policy will not be registered.

There will be a ‘break’ on insurance

If the policy is not renewed in time, then it is considered as a break-in policy. Insurance companies usually give a grace period of 15 to 30 days from the due date. But if there is a delay of more than 90 days, then after this break there is no option but to take new insurance. Taking a new policy means that the vehicle will be re-inspected. Also, there will be no claim bonus discount.

How to save the policy from lapse?

There are a few simple steps that can be taken to avoid the lapse of the policy. To avoid breaking the own damage policy, set the expiry date reminder on your phone or calendar. As far as third party insurance is concerned, it has become mandatory for new vehicle buyers from 2018. Long term third party cover is available with every new vehicle. Three years third party cover has to be taken for the car and five years third party insurance is mandatory for the two-wheeler. If you have a car before 2018 then you will have to take third party insurance separately. Own damage insurance is not mandatory but you should have it so that this insurance can protect you from financial loss in bad times.