Introduction
A car insurance policy, often referred to as motor insurance, is a legal agreement between a vehicle owner and an insurance company. This contract specifies the terms and conditions of coverage, the premium to be paid, and the policy's duration. Typically, car insurance policies encompass components such as third-party liability, comprehensive coverage, and personal injury protection, varying based on the selected coverage level.
What is a break-in period in car insurance?
The break-in period is the time between the last day of your old car insurance policy and the day you renew it. For example, If your insurance policy expires on January 1, and you renew it on January 30, the 30-day gap in between is the break-in period. During this break-in period, your car insurance is dormant. If your vehicle faces any damage during this time, it won't be protected by your policy.
Also Read: Different types of car insurance policies and their benefits
Why it's important to renew your motor insurance?
Renewing your motor insurance is a crucial aspect of safeguarding your financial well-being and ensuring compliance with the law. Let’s look at the reasons why it’s important to renew your motor insurance on time:
1. Continued coverage
The primary purpose of a car insurance policy is to provide financial protection for your vehicle. Timely renewal offers benefits like No Claim Bonus (NCB), cashless repair facilities, zero depreciation coverage, and more. However, these advantages are only accessible when your policy is active. Failing to renew your policy can result in a coverage gap, leaving you vulnerable to financial liabilities in the event of an accident.
2. Adhering to motor laws
It is a legal mandate that every vehicle must be covered by a valid car insurance policy. This means that your car should remain insured as long as it is used on public roads.
Driving an uninsured car is illegal and can result in hefty fines or even imprisonment. In India, the fine for driving an uninsured car can be as high as Rs 2000 for the first offence and Rs 4000 for the second offence.
3. No claim bonus remains intact
The No Claim Bonus (NCB) is a reward provided by insurance companies to car owners who refrain from filing any claims during a policy year. NCB can lead to a reduction in the renewal premium, and increase the cover amount.
4. Prevents an increase in premium
Allowing your car insurance policy to lapse can lead to an increase in your insurance premium. Insurers may hike your premium when they discover your expired policy, considering you a higher risk. As if that isn't enough, you might lose your accumulated NCB, which could have lowered your premiums had you renewed your policy on time.
Renewing your car insurance online can be a smooth process, but it's essential to consider these five tips for a seamless experience:
1. Choose between a third-party liability or a comprehensive plan, aligning it with your specific needs and budget.
2. Explore valuable add-ons like Zero Depreciation and Engine Protect cover to enhance your coverage.
3. Check the list of cashless network garages tied up with your insurer for a convenient claims process.
4. Ensure that your car's Insured Declared Value (IDV) is appropriate to receive full policy benefits.
5. Understand and select deductibles wisely, as they impact your claim amount and premium.
6. Seek policy quotes from different insurers for affordability. Focus on comparing similar coverage for a meaningful assessment.
Also Read: Drive safely and lower your motor insurance premium
Setting reminders for your policy's expiration date is a good practice to avoid unnecessary hassles and financial burdens later on. Keep in mind that renewing your motor insurance is not just a legal obligation, it's also a smart strategy to secure your financial well-being and enjoy peace of mind while driving.
Disclaimer: This article is for information purpose only. Purchase of insurance product by Bank’s customer is purely voluntary and not linked to availment of any other facility from the Bank. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision