Why Grace Period Is Important In Car Insurance?

Every automobile insurance policy has a one-year or three-year validity period after which it must be renewed in order to be lawful. According to the Insurance Regulatory and Development Authority of India (IRDAI), every automobile owner or driver is required to renew their car insurance before it expires, and a grace period of up to 90 days is granted to make this procedure more convenient.

The Importance of a Grace Period in Car Insurance

What Is the Grace Period and How Does It Work?

You may still renew your auto insurance coverage if it has expired because you did not renew it on time. It is a period of time granted by insurance firms, usually, 30 days or longer, during which policyholders can renew their contracts without losing their benefits. The grace period, on the other hand, does not grant an extension to a lapsed policy; it is still regarded as expired, and the insurer will reject all claims made during this time since the policy is void. Simply put, it provides policyholders with an extra choice for renewing their automobile insurance by paying a premium.

In the Grace Period, Policy Renewal Is Critical

According to the insurance firm, the grace period for auto insurance is anything from 30 to 90 days. It is offered to policyholders who have missed the deadline to renew their automobile insurance plan so that they can legally drive on the roads and keep their policy advantages. A grace period in a vehicle insurance policy has a number of advantages:

• Premiums are Cheaper

After an auto insurance coverage expires, finding a new policy to purchase and paying a higher price for it becomes challenging. By permitting you to renew your existing automobile insurance within the grace period, you will be able to save on this higher amount of premium.

• Inspection of the Vehicle is not Required

In the event that a car insurance policy is renewed after it has expired, car insurance companies conduct a re-inspection. However, if you renew your auto insurance coverage within the grace period, your insurer may forego the inspection procedure.

• No-Claim Bonus is Still in Tact 

Even after your vehicle insurance coverage expires, the grace period allows you to preserve your collected no-claim bonus. It guarantees that the auto insurance coverage is renewed before it expires, allowing the no-claim bonus to be kept.

Take Away

It's critical to renew your car insurance policy to maintain your coverage current and valid. If you don't renew your plan before it expires, you might be subjected to a variety of penalties. However, if you forget to renew your auto insurance before it expires, the grace period may help you avoid having your policy lapse. To make this happen, contact your insurance carrier right away and attempt to understand their renewal rules as well as how your advantages, such as no claim bonus, are carried through in such cases. It's vital to renew your car insurance before it runs out. If a person misses their renewal date, they can still renew their automobile insurance coverage within a grace period to keep it from expiring. With the information above, we hope you will see the value of the grace period and take advantage of it to keep your vehicle insurance policy active. According to the Insurance Regulatory and Development Authority of India, every policyholder must renew his or her motor insurance before it expires (IRDAI). 

Do read - 5 Tips to Follow to Buy the Right Car Insurance in India

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.