Significance of Grace Period in Car Insurance
A car insurance policy is required to be renewed before its expiry date to continue to use it for a longer period of time. If you fail to renew your car insurance policy on time, you can renew it within a grace period. Let’s get to know about this grace period and its significance in this article.
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Car insurance policy comes with an expiry date before which it has to be renewed. Most of the car insurance policies are valid for one year, however, some long-term car insurance policies are also available. As per the Insurance Regulatory and Development Authority of India (IRDAI), every policyholder needs to renew his or her car insurance before the expiry date. Failing to renew a plan before a defined expiry date can lead to the end of the contract, therefore, you should renew the policy on time to keep your car insurance policy active. However, even if the expiry date is crossed, many car insurance companies provide their policyholders with a grace period to renew their car insurance plan.
What Is Grace Period in Car Insurance?
Most of the insurance companies provide a car insurance grace period of around 30 days or more to renew the lapsed car insurance policy. The grace period does not extend the policy coverage but just provides a window in which you can renew the car insurance policy by paying the premium. However, if your car gets damaged during this period and you make a claim against the damage, the insurance company can reject your claim on the grounds of an invalid car insurance policy as the policy period has expired.
Significance of Grace Period in Car Insurance
Most car insurance companies offer a grace period of 30 days up to 90 days, which varies from insurer to insurer, in case of a lapsed car insurance policy. In order to avail the most of this grace period, policyholders should try to renew their car insurance policies at the earliest after the lapse. Here are some major benefits of the grace period in car insurance:
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Vehicle Inspection
If you are able to renew your car insurance policy within this grace period, your insurance company may waive the process of car inspection. -
No Claim Bonus
With policy renewal in the grace period, you will secure your policy from getting lapsed which can permit you to retain your accrued No Claim Bonus (NCB) benefit. -
Cost of Premium
Renewal of car insurance policy within the grace period will save you from the tedious task of finding a new policy and paying a higher premium to own that plan.
Conclusion
It is crucial to renew the car insurance policy before the expiry date. However, if anyone somehow misses the renewal deadline, he or she can renew car insurance policy within a grace period to save it from becoming lapsed. With the above-mentioned points, we hope you will understand the significance of the grace period and avail it to keep your car insurance policy active.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
