Importance of Grace Period in Car Insurance

Every car insurance policy comes with a validity of 1 year or 3 years after which it has to be renewed to keep it legally valid. As per the Insurance Regulatory and Development Authority of India (IRDAI), every car owner or driver has to renew his or her car insurance before its expiry date and to make this process more feasible a grace period of up to 90 days is provided. 

If the car insurance policy could not be renewed before the date of expiry, it can end the policy contract with the insurance company that can omit the legal compliance to make the insurer liable to provide any coverage to the policyholder. It can also lead to the requirement of reinspection for policy renewal and loss of no claim bonus. To cope with such situations, insurance companies provide a grace period to their customers after the expiry date of the policy to get their car insurance plan renewed without losing any of their benefits.

What is Car Insurance Grace Period?

If your car insurance policy is expired as you could not renew it on time, you can still renew it in the grace period. It is a period of generally 30 days or more provided by the insurance companies within which policyholders can renew their policies without losing any benefits. However, the grace period does not provide an extension to the lapsed policy and it still is considered expired due to which the insurer will reject all the claims during this period as the policy is invalid. In simple words, it gives an additional option to policyholders for car insurance renewal by paying the premium.

Importance of Grace Period for Car Insurance Renewal

Grace period in car insurance ranges between 30 to 90 days as per the insurance company. It is given to policyholders to renew the car insurance plan even after missing the deadline to enable them to drive legally on the roads and hold their policy benefits. Here are a few benefits of a grace period in a car insurance policy:

1. Lower Premium

After the expiration of a car insurance plan, it becomes difficult to find a new policy to buy and pay a higher premium for it. The grace period will assist you to save on this increased amount of premium by allowing you to renew your existing car policy.

2. No Car Inspection 

The car insurance firms do the re-inspection of cars in case the car insurance policy is renewed after the expiration. But, your insurance company can waive the inspection process in case you renew your car insurance policy within the grace period.

3. Intact No Claim Bonus

The grace period helps you save your accumulated no claim bonus even after the expiry of your car insurance policy. It ensures the renewal of the car insurance policy before the expiration of the policy which retains the no claim bonus.

Conclusion

Car insurance policy renewal is important to keep the coverage valid and active. You should renew your plan before it expires, otherwise, you may have to face different types of consequences. However, if anyhow you miss renewing your car insurance before the expiry date, the grace period can save your plan from getting lapsed. To make this happen, you should immediately get in touch with your insurance company and try to understand their renewal policies and carry-forwarding of your benefits like no claim bonus in such situations.

Also Read: 

How To Lower Premium of Your Car Insurance?

Top Factors That Determine The Premium of Your Car Insurance Plan

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.