Car insurance renewal: Why it is important and how to do it

Car insurance is an important part of owning a vehicle and driving on Indian roads. As per the Motor Vehicles Act, of 1988, it is mandatory to have third-party car insurance. It is illegal to drive a car without valid third-party insurance. However, taking your own damage cover is a choice, and one can choose to not take it. Both third-party or a comprehensive insurance policy are valid for a period and usually, most insurance policies expire after one year. Car insurance renewal is mandatory to ensure there are no legal issues or other problems while driving the car. Let us discuss why is it important to renew your car insurance on time.

Continuous coverage

When renew the car insurance policy without any interruption, helps a lot in making sure that you have uninterrupted insurance. It is always advisable that the car insurance policy is renewed before the expiry date. There is no coverage offered by the insurance company during the grace period and there are many consequences one will have to bear if they drive without a valid car insurance policy.

Financial protection

In case the car meets with an accident, a comprehensive car insurance policy will take care of any third-party liability and also any personal liabilities and take care of the damages and repair work needed. This saves the insured from any financial burden as with a policy that is lapsed, both the expenses will have to be paid from one’s own pocket, thus increasing the financial burden.

Avoid losing no claim bonus

No claim bonus is the discount an insurance company gives the insured for every claim free year. In case the policy is not renewed in time and car insurance renewal is not done in the grace period also, the policy is considered as lapsed. In such a case, the insured loses all the accumulated no claim bonus and one loses this discount. At the time of taking a new car insurance policy, will increase the cost of insurance and thus, increase the financial strain.

Avoid legal hassle

It is illegal in India to drive a car without a valid car insurance policy. A basic third-party car insurance policy is mandatory as per law and thus, if you drive without a valid insurance policy and are caught by the police, you can face legal action.

Conclusion

Car insurance is very important in case of accidents because it protects the car owner and other persons in the event of an accident. Car insurance renewal on time makes sure that you hold this essential cover which does not leave you to panic. It is beneficial to renew car insurance on time because it is an assurance of continuous coverage without break in the cover which attracts fines, it attracts low premiums due to customer loyalty and most importantly assures compliance with the laws of the land. Look at renewal notices, review the plans at least once a year and make payments before the end of coverage dates to renew automatically.