Motor Insurance Amid Covid Times: The economy of the world was badly affected due to the Corona epidemic. Due to this epidemic, there has been a change in the way of working and the trend of work from home has increased rapidly. Now as the situation is getting normal, workplaces have started opening but still the situation has not become completely normal due to Corona. In such a situation, the question arises in the minds of many people that when they do not have to take their car on the road, then why spend money on renewing its insurance?
However, even if you are not going out with your car or bike, it is important to get the insurance done on time as it covers not only accidents. Let us know what are the benefits of renewal of motor insurance and what can be the disadvantages if it is not renewed on time.
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Features of Motor Insurance Renewal
- Non-Accidental Risk: Motor insurance not only provides insurance cover but also covers against storm, earthquake, natural calamity, building collapse, stone fall, fire and theft etc.
- No-Claim Bonus Year: If you do not take the claim in any year, then it gets the benefit in the form of bonus. Under the No Claim Bonus, a discount of up to 20-50 percent is available depending on the year in which no claim has been made. However, this benefit may be lost if the policy is not renewed within 90 days of the insurance expiry. This benefit is also available even when you shift from one insurance company to another.
- Car test again: If you renew the insurance of your car or bike, then the biggest advantage of this is that your vehicle will not be tested again. This means that if you have not renewed on time and renew the policy after a long gap, then the coverage will be less and the premium may also increase.
- If the policy is not renewed on time, then the policy will be expensive: If motor insurance is not renewed on time, then as per the rules of insurance regulator IRDA, due to changing third party premium every year, you may have to pay more premium. Apart from this, if there is any defect in the vehicle during the gap between the expiry of the insurance policy and the renewal, then it will be investigated and this may affect the add-ons.
- Zero Depreciation Benefits: Some insurance companies do not offer the benefit of non-no claim bonus or zero depreciation in case of non-renewal period. Depreciation refers to the decline in the actual value of the car with its age. The older the car, the greater the depreciation.
- Penalty: If you drive your car or bike without valid insurance, you may have to pay a fine. Under the Motor Act 2019, if caught for the first time, a fine of Rs 2 thousand and after that every time a fine of Rs 4 thousand may have to be paid. Third party insurance is mandatory for all vehicles. If you are not renewing the motor insurance policy, then at least under the Motor Vehicles Act 1988, you must get Third Party Insurance (Limited Only Policy) for the use of your vehicle in public places.
(Article: Parag Ved, President and Head – Consumer Lines, Tata AIG General Insurance)