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Indian motor laws make it mandatory for you to buy an insurance policy for all your automobiles. However, your job does not end here; you also need to keep your policy active by renewing it when its term is about to end. You need not worry about setting reminders as your insurance company would send you an intimation as the renewal date approaches. Despite this, many forget to renew their policies, which leads to a lapsed insurance cover. It is important to remember that a lapsed policy is as good as having no policy at all.
Considering this, insurers provide something known as a grace period. But what is this grace period? Keep reading to know more.
What does ‘grace period’ mean?
A grace period is a gap of a few days that your insurer provides after your policy has expired. It is a second chance for you to renew your lapsed insurance policy while retaining any and all benefits that you had accrued in the previous policy term.
It is worth remembering that a lapsed policy, even within the grace period, does not offer you any coverage. For that, you need to have an active policy. The grace period is useful when it comes to insurance renewal as it helps you retain the no-claim bonus (NCB), if applicable.
What happens upon policy expiry?
Upon policy expiry, your insurance provider is no longer liable to provide you with the coverage amount until and unless you renew your policy. It is also illegal to drive a vehicle that does not have an active insurance policy as the Motor Vehicles Act, 1988, mandates all vehicles plying on Indian roads to have the minimum third-party liability coverage. If you are caught driving an uninsured vehicle, you would be charged a hefty fine. Repeating this offence could also land you in jail.
Purpose of the grace period
It is a way to have your inactive policy renewed without an inspection. On the other hand, your two-wheeler would be liable to undergo an inspection if the grace period has passed. This is also likely to result in an increase in your two-wheeler insurance premiums. Therefore, do not wait for your policy to lapse.
No-claim bonus lapse
If you do not raise any claims in a given policy period, you are entitled to a concession on the premium amount for your next policy term. This is termed as no-claim bonus (NCB). If you’ve had five claim-free years, the concession goes up to 50%.
However, if you do not complete two wheeler insurance renewal within the grace period offered to you, the accumulated NCB will lapse.
How to go about the grace period for online two-wheeler insurance renewal?
Ideally, you should not wait for the grace period to start as it is logical to renew your two-wheeler insurance policy before it expires. A better approach would be to begin with the renewal process at least a week in advance so that you get enough time to compare, review, and renew your two-wheeler insurance online.
Online two-wheeler insurance renewal makes the process very simple and helps you save time. You can compare various policies to make an informed decision, but always remember to go through the terms and conditions before you purchase a two wheeler insurance online.
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