With a new car or a new bike, usually the showroom owner also gets it insured. Often vehicle showrooms have an agreement with one or the other insurance company. But, when the term of that insurance is over, many people do not renew it. But doing so can be very risky for you. In this article, we will know why it is necessary to renew car or bike insurance on time?
Why is it necessary to renew car insurance?
The car or bike policy should be renewed even before its term ends. You definitely have to pay some money in this, but there are many types of economic and mental benefits. such as-
1. Avoid fines and legal action
No vehicle can be used in public place without insurance. Public place means road, street, park or any such place where anyone can come. Violators can be fined or both fined and action taken.
Through the Motor Vehicles (Amendment) Bill, 2019, the government has increased the fine to Rs 2000 for vehicles caught without insurance. This amount of fine has been fixed for two-wheelers, cars and all motor vehicles. Failure to pay the fine can lead to 3 months in jail. Or both the punishments (Rs 2000 fine and 3 months imprisonment) can also be given together.
Not only this, the Supreme Court has also said in one of its decisions that in case of an accident involving an uninsured vehicle, compensation should be given to the accident victim by selling that vehicle.
2. Provides physical, mental and financial security
The accident never comes without telling. If your vehicle is not insured, and unfortunately some incident happens. So, the damage caused to you and your vehicle will be borne by you. You will also have to pay for the damage caused to any other person or property. And this compensation will be according to the status of the person whom you have harmed. Vehicle insurance protects you from a variety of problems—
If you have taken only third party insurance, then the insurance company will pay the damages caused to any other person or property. If you have taken comprehensive insurance, then not only will the insurance company pay for the damage caused to any other person or property, the insurance company will also pay compensation for the damage caused to your vehicle.
If you are physically harmed, you will also be compensated. Depending on the level of physical damage, you can get compensation of 15 lakhs or less. Because, it is mandatory to take personal accident cover of at least 15 lakhs on taking either third party or comprehensive insurance.
By not having vehicle insurance, you invite such serious problems. Mental problems will have to be faced separately in the run-of-the-mill and legal process
3. Avoids the long process of re-evaluation
Your insurance should be renewed by the date on which your old insurance policy expires. Without renewal, if your vehicle meets with an accident after the next date, the insurance company will not pay any compensation or damages for that loss.
Your insurance should be renewed by the date on which your old insurance policy expires. Without renewal, if your vehicle meets with an accident after the next date, the insurance company will not pay any compensation or damages for that loss.
However, some insurance companies have a grace period of a few days (3 to 30 days). You will get the benefits of your insurance policy even if you renew the insurance during the grace period. If the insurance is not renewed even in the grace period, it will come under the expired status ie lapsed policy category.
If your insurance plan has already reached expired status then before renewing that insurance policy your vehicle will be re-assessed IDV (Insured Declared Value). Not only will it take time, the prescribed fee for the survey will also have to be paid separately
4. Can take advantage of NO CLAIM BONUS
If 90 days have passed since your policy expired, then you will not get the benefit of no claim bonus. Under No Claim Bonus, vehicle insurance has the facility that if you have not made any insurance claim for more than one year, then you get a waiver of premium (insurance charges) on taking the next insurance policy.
The more you do not make an insurance claim continuously, the higher the discount on the premium of the next insurance policy
- 20% discount: On not claiming for 1 consecutive year
- 25% Rebate: On not claiming for 2 consecutive years
- 45% discount: On not claiming for 4 consecutive years
- 50% Rebate: On not claiming for 5 consecutive years
You can get this discount only if you get your car insurance renewed in time.
5. There is also a compulsory personal accident insurance of fifteen lakhs .
Along with third party insurance, it has also been made mandatory to take personal accident insurance of at least Rs 15 lakh. For which IRDA has also fixed the premium (insurance fee) at Rs 750 per year. And this requirement will be applicable with all types of insurance plans, even if you buy only third party insurance. Or comprehensive plan.
The minimum limit for personal accident insurance is Rs 15 lakh for every vehicle owner, whether they own a two-wheeler, a four-wheeler or a large vehicle. If a person wishes, according to his convenience and capacity, he can take personal accident insurance of more than Rs 15 lakh, but not less than this.
