In India, the bike insurance policy has a validity period ranging from one to three years. When the policy’s validity expires, the policy’s features and benefits perish, after which, if something goes wrong with your bike, the insurer is not responsible for the damages.
Now, you must be concerned about what would happen if you miss the deadline and your policy expires. What happens if your bike is involved in an accident the day after your policy expires? Before you stress over bike insurance policy renewal, learn about the ‘Grace Period’.
What is the grace period of bike insurance policy renewal?
It’s not uncommon for people to miss their insurance payment deadline. However, the non-renewal of a bike insurance policy has several repercussions. One of these consequences is the loss of all accumulated benefits such as NCB. Therefore, the grace period is a blessing. The grace period refers to the policy extension after the policy expires. The extension is usually provided for a period ranging from 30 to 90 days. It is another chance that your insurer gives you to renew your policy.
Simply put, it is an additional time that the insurer provides you for bike insurance renewal and allows you to pay the premium without losing on accumulated benefits.
What happens if you fail to renew your two-wheeler insurance on time?
You suffer severe losses when you don’t renew your bike insurance on time. The accumulated benefits of your policy get terminated. For example, suppose your disciplined riding over the last few years has helped you earn a no-claim bonus of 50%. However, due to the non-renewal, the 50% discount on your premium that you may have received will be no longer available.
In addition to that, there is a severe fine of up to ₹2,000 on being caught by the traffic police for driving without third-party legal cover. Depending upon the situation, you may also face imprisonment of up to three months. The rules and regulations of the legal consequences of driving without insurance are stated in the Motor Vehicle Act, 2019.
Consequences of driving with a lapsed policy:
- If you do not renew your policy on time, your bike will be subject to a full inspection for a lapsed policy.
- A lapsed policy is the same as having none, and it will be subject to all legal implications and fines.
- If an incident occurs and your bike is damaged, you’ll have to bear all costs associated with repair and replacement.
- The continuity benefits of the policy like the no claim bonus will also be discontinued.
Should you stress about the grace period?
The insurer provides a grace period for your convenience. However, it is advisable not to get trapped in this concept. It is always suitable to renew your policy before the expiration date. If you are not satisfied with your existing insurer and want to switch to a new insurer, don’t wait until your coverage expires. You may look out for portability or a new policy at least 10 days before the expiry.
Nowadays, purchasing a new policy is just a matter of a few clicks. Simply visit the insurer’s website and get instant bike insurance renewal.
Also Read: 5 Mistakes To Avoid When Buying Insurance
To sum it up
Grace period helps policyholders from a last-minute hassle. However, the only benefit it offers is allowing bike insurance renewal after the due date while keeping the continuity benefits intact. However, if you renew your bike insurance policy after the deadline, certain insurers may charge you a higher rate.
The legal ramifications of riding a bike with an expired policy but within a grace period are identical to driving an uninsured vehicle.
