Riding two-wheeler without insurance is a punishable offense in India. Minimum third-party insurance is compulsory to drive motor vehicles on Indian Road. So, it is ideal advice for everyone to have a valid insurance policy for your two-wheeler.
You must be aware of your lapsed two-wheeler insurance. Purchasing and renewing on time is a healthy practice and this helps you in many ways.
It saves you from heavy fines and also gives you financial protection in case of any own- and third-party damage.
What is Lapse Two Wheeler Insurance Policy?
Two-wheeler insurance policy has the validity of a certain period. Normally it is one year if you have taken a one-year policy and two years or three years in case of a multi-year policy. You need to renew it on time to avail of the services continuously.
But if you do not pay renewal premium to renew this policy on time then it gets lapsed and services discontinued by the insurance company for the break-in period.
Companies provide some period of time to renew the policy but if you do not renew further then you may miss the chance to renew the same benefits in your policy.
What are the Disadvantages of Lapse Two Wheeler Insurance?
There may be many situations that you may face if your insurance policy is expired. Some disadvantages of lapsed two-wheeler insurance are given below:
1- Heavy Penalty
As per the Motor Vehicle Act 1988, it is mandatory to have third party insurance for your vehicle. If you are riding your bike on the road without it then there is a heavy penalty. From 1st September 2019 law is very strict now.
If traffic police caught you riding a bike without valid insurance then the penalty is Rs.2000 and or Imprisonment of three month
If traffic police caught riding a bike without valid insurance twice then the penalty is Rs.4000 and or imprisonment of three months.
So, it is a better decision to have proper bike insurance. You can analyze that sometime your insurance premium may be lesser than the penalty amount also.
2- Third-Party Liability
Understand the reason behind the mandatory third-party insurance clause of the Motor Vehicle Act. It is optional that you purchase your own damage section of bike insurance but TP policy is legally compulsory. Why so?
Suppose you are going with your bike somewhere and you hit someone. The property of someone else is damaged by your bike or someone died in your bike accident.
Now who will be responsible for the damage of another person? Obviously, you will be responsible because it happened on your bike only.
Third-party insurance may safeguard you in this kind of situation legally and financially as well. If you have proper insurance for your bike then claim will be paid by the insurance company.
Claim can be property loss or personal loss in both the case you will have protection through your two-wheeler insurance policy.
3- Own Damage Loss
What if your bike gets damaged in an accident or stolen by someone? You will file an insurance claim, right? But what if got to know that bike insurance renewal date is gone in last week. You forgot to renew it.
You have a financial hit in your pocket because you will not get any claim. The company has discontinued the insurance services because of not renewing it.
4- High Premium
Lapsed insurance policy has another disadvantage also. You may get charged a higher premium when you renew the policy after a very long period of expiry of it.
Insurer does not provide you a good discount on lapsed policy. Some insurance companies provide no discount or lesser discount on those bike insurances in which previous insurance policy is not available.
Usually, the renewal premium of continued policy is lower than the lapsed policy. in some cases, the risk start date maybe after three days of purchasing the policy (T+3).
5- Loss of No Claim Bonus
Your insurer provides no claim bonus rewards if you do not file any claim for the complete policy period.
But what if you do not renew the policy on time? What if the policy expiry date crossed 90 days?
You will lose all the no claim bonus if do not renew your bike insurance policy within the 90 days of the expiry date of the policy. You may also get a very less tariff discount if you don’t have any NCB in your policy.
If you don’t want to waste your no claim bonus then you should always mind the renewal date of the policy and renew it on time.
6- Inspection of Vehicle
One more problem is waiting if your two-wheeler insurance policy has lapsed. That is an inspection of the vehicle. Some insurance companies do inspection of bike if an insurance policy has lapsed.
There may some inspection charges also and of course may be time consuming.
Inspection is required for comprehensive policy only. For third party insurance there is no requirement of vehicle inspection.
Inspection of vehicle is good practice because it reduces the scope of any dispute at the time of claim settlement. Inspection can be done through a physically available surveyor or through Mobile Application also. Technology has made it easy to do self-inspection of the vehicle.
7- Loss of Add On Covers
Longer break-in period in policy may give you another loss also. Some insurance companies do not prefer to provide some add on if the policy is expired for a very long period of time.
Suppose you have Add on cover like zero depreciation cover and or Engine cover in your policy and you have not renewed the policy on time.
It is Possible that your insurer does not extend these benefits further.
How to Renew or Reinstate Your lapsed Policy?
Some years ago, it was not easy to access many insurance companies, compare and purchase the insurance policy on a few clicks. But due to technology and the internet, it has become very easy to access.
You have multiple options to renew the policy. You can do it online and offline as well. In offline mode you can get in touch with your insurance agent or you can visit the branch of the insurance company.
For online you can visit to company website or you can download mobile applications and you can renew it easily.
For online mode you can pay the premium by many options like debit card, credit card, net banking etc. Some companies have the option to pay the premium through wallets also.
How to Avoid Lapses of Your Bike Insurance Policy?
- You should set a reminder of the policy renewal date.
- Please do not wait to renew the policy at the last minute. You may some urgent work or maybe stuck somewhere then you will not able to renew the policy on time.
- If your budget allows you then you should purchase long term insurance.
- Your insurance company sent you renewal notice and renewal reminders on time to time. So that your email is, mobile number and address should be correct.
With the above details, you may understand that there are lots of benefits if you renew your two-wheeler insurance policy on time.
It will safeguard you from the legal liability and provide you financial protection also. You should always have a proper and valid two-wheeler insurance policy.