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  • Why do car insurance renewal during Coronavirus?

    Published on May 31, 2021

    The second wave of the pandemic has been ravaging India ruthlessly. The number of cases is rising rapidly with an all-time high fatality. The respective state governments have imposed lockdown, weekend lockdown, or night curfew to control the situation, enabling people to step out only for essentials. During this phase, digitisation has taken precedence as everything right from groceries to medicines is available online now.

    Even the finance sector is strongly promoting online activities, and one such section is insurance. When it comes to vehicle insurance, they need timely renewal to do away with the penalties while driving on the Indian roads. After all, car insurance is compulsory according to the Motor Vehicle Insurance Act, 1988.

    But the confusion is, will car insurance renewal work during Coronavirus? Like the lockdown in 2020, many are avoiding the renewal of their policy. The primary reason is that the lockdown and curfews have limited the usage of their vehicle. You remove your car only for buying essentials. As mentioned, vehicle insurance is a must, irrespective of its usage. Besides, you still use the car for buying essentials or driving to the hospitals.

    When you do, you might get caught for being uninsured and land in trouble. Here are the following reasons to consider car policy renewal during a lockdown:

    Third-party liability is still mandatory

    The Motor Vehicles Act mandates everyone to own third-party liability. Whether you use the vehicle regularly or rarely, it should be insured with third-party coverage. If you get caught driving without the third-party cover, you will attract a fine. When caught for the first time, the fine is of Rs. 2,000 or up to three months of jail. If caught driving uninsured a second time, you need to pay Rs. 4,000 or spend a jail term of three months.

    Third-party liabilities could lead to financial losses

    Car accidents happen without warning. Some could lead to injuries or cause damage or losses to the property. Since you are responsible for injuries or damages caused to the third party, your legal liability is to pay for the expenses. These liabilities could cause significant financial losses based on the extent of the loss. The third-party insurance covers liabilities on your behalf and prevents any significant financial setback.

    Unused cars get stolen or damaged

    The ongoing lockdown or curfew might be forcing your vehicle to be standing in the parking lot, driveway, or roads for days, but that does not protect your car from unforeseen events. Any natural calamity could harm your vehicle. Moreover, lockdown does not provide a break to thieves, and they will continue to attempt stealing your car. With the four-wheeler insurance, you need not bear the losses owing to such scenarios as the insurer pays for them.

    Increased renewal premium

    Considering there is low usage of vehicle, you might decide not to renew them. But doing so results in higher premiums during renewals. This happens as the policy lapses since you miss out on the expiry date of the renewal. You will also lose the No Claim Bonus after 90 days from the expiry date and thereby exhaust your savings on the renewal premiums. With online facilities available, you can do car insurance renewal online at home.

    Lockdowns, masks, social distancing, and PPE kits have become the new norm. But ignoring the need to do renewal is being irresponsible. You should do car insurance policy renewal timely, whether lockdown or no lockdown.


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