What Is Non-renewal And Cancellation of Policy in Car Insurance

According to the Motor Vehicles Act of 1988, car insurance is a must-have for all car owners. With a car insurance plan, you can get protection in case of any uncertainty or theft, or damages. Now, there are specific terms associated with a car insurance plan that you should know about. There are two terms, non-renewal and cancellation of a policy in car insurance Read on to know all about the non-renewal and cancellation of a policy in car insurance. 

What is Non-renewal in Car Insurance?

A non-renewal in car insurance means that in the case when your car insurance policy has expired, you need not renew it. It is up to the policyholder whether they want to renew the car policy or not at the time of policy expiry. However, it is important to understand that the insurer needs to provide prior notice regarding the non-renewal of their car insurance plans.

Listed below are the reasons for the non-renewal of car insurance:

• If you have purchased or replaced your car, then you may want to buy a new car insurance plan
• On checking the claim history if it is found that you have raised multiple claims, then your insurer might choose to not review your car insurance renewal
• In case you have violated traffic rules on several occasions, then the insurer might not renew your car insurance plan
• If you are relocating to a new place where your insurer is not offering car insurance coverage, then you will not get your plan renewed
• If you are not satisfied with the coverage under your car insurance plan, then you might not get it renewed

What is Cancellation in Car Insurance?

As the name itself suggests, cancellation in car insurance means the end or termination of your policy. The cancellation of car insurance can be done either by the policyholder or the insurer itself. 

Here are some of the reasons why the car insurer cancels the policy:

• In case if you have concealed any information, then the insurer might cancel your car insurance plan
• If the policyholder is not paying the premiums on time, then the insurer can get your car insurance plan cancelled
• If the policyholder has raised any fraud claims
• If the insurer finds that the driver has a bad driving record and has been fined on several occasions

• If the insured is diagnosed with a critical illness like epilepsy, cancer, etc. 

Difference Between Non-renewal And Cancellation of Policy in Car Insurance

Listed below are the differences between non-renewal and cancellation of a policy in car insurance:

• A non-renewal happens after the policy tenure has ended, on the other hand, the cancellation can be done at any time during the policy term
• A non-renewal generally does not affect the car insurance premium. However, cancellation of the policy might result in increasing the premium by your next insurer

In addition, if you cancel your car insurance policy, there are chances that your insurer might not provide a car insurance plan next time. However, during non-renewal, your insurer can still provide you with another car insurance plan.

Take Away

Thus, in a nutshell, whether your car insurance companies plan is cancelled or is non-renewed, then you must make sure to buy a new car insurance plan instantly.

Also Read: 

Process And Documents Required To Get NOC For Car