After the implementation of the new Motor Vehicle Act, fines for driving uninsured vehicles have increased. Here is how you can renew your lapsed policy or buy a new one.
BL Research Bureau
Across country, there has been a maddening rush to renew lapsed insurance policies by motorists, thanks to the new Motor Vehicle Act that levies heftier fines for those driving uninsured vehicles.
But apart from the fine, there are other reasons for you should renew your lapsed motor insurance policy, that is, a policy which was not renewed before its expiry date. If you hit a third-party vehicle and the vehicle is damaged, or the person driving that vehicle suffers an injury or dies, and there is a legal proceeding on you, you will have to settle it personally. If your vehicle had been insured, the insurance company would have stepped-in and paid for the damages.
Read also – Motor Vehicles Act impact: To avoid new harsh fines, vehicle owners rush to buy insurance
Note that the liability is unlimited in the case of injury or death of a third-party in a road accident; the compensation is decided by the court or mutually agreed upon.
Further, if you do not renew your policy on time and it has lapsed for more than 90 days, you will be losing all the ‘no-claim bonus’ on the policy.
So, here is what you can renew your lapsed policy/buy a new one.
Read more: Traffic violations could soon increase your motor insurance premiums
The moment you realise that your policy is expired and you have forgotten to renew it, do not drive the bike. Leave it at home.
If your earlier policy was purchased through an agent, approach him again. He will be able to help and get the lapsed policy renewed from the same insurer at a lesser cost.
Compare rates and buy online
Buying motor insurance online is very simple today. You can either go to your same insurer’s website, login with your policy number and renew your policy or look for a new insurer and take a fresh policy.
Online aggregators, including Policybazaar.com, Coverfox Insurance and Renewbuy.com, offer premium comparison between insurers.
When you select your bike’s manufacturer, model and variant, and the year of registration, and specify the RTO where it was registered, it will provide the premium rates from different insurance companies.
In two-wheelers, for a Honda Activa (Standard 125 CC) of 2017 model, for instance, the premium for a comprehensive cover (third-party insurance plus own damage (OD) cover) comes to about ₹850-1,000 per annum (for Insured Declared Value, i.e., sum insured of ₹39,000).
With the new-age insurers, like Digit and Acko, the process of online purchase of motor insurance is even simpler. It is just three/four steps, you can get your insurance with these companies. But that said, with traditional players, there is comfort of a strong track record in settlement.
Tips to save premium
If you want to save some money, then you can buy only the third-party cover, which is mandatory under the law, and not go for a comprehensive cover that includes OD insurance.
A third-party insurance will cover only the legal liability arising out of damage to the property of a third-party or bodily injury/death of the third-party.
Carrying on the example above, for a Honda Activa (Standard 125 CC) of 2017 model, the premium on a third-party cover for a year comes to only ₹750 – a saving of ₹100-250, compared to cost of a comprehensive cover.
The other option, for those looking to save on premium, is to take a lower IDV. Insured Declared Value, is the market value of a vehicle, less depreciation (depending on the age of the vehicle). This is the value for which you bike/car will be insured. Note that, on damage to the vehicle, this is the maximum amount the insurer will pay you.
The insurance aggregator sites itself will give you the option to go for a lower IDV. For instance, at cover fox site, you have the option to go for IDV of ₹27,475 for the same Honda Activa 2017 model mentioned above.
By this, you will see ₹100-150 saving in the premium for a comprehensive cover.
While you will be saving premium straight away by going for a lower IDV, note that if the vehicle is under insured, you may end up paying from your pocket for repair and services in case of damage to the vehicle.