Commercial vehicle insurance, like other forms of insurance policies, has an expiry period. In most instances, the validity period of any active insurance policy is a year. One can purchase a multi-year vehicle insurance policy that can extend the validity for a number of years. However, there will come a time when one has to renew their insurance policy regardless. It is equally vital to renew your policy at the right time. Renewing after the policy has lapsed can lead to several consequences. In this article, we have listed down several reasons why you must renew your commercial vehicle insurance on time, every time.
- Non-renewal could land you in legal trouble
As per the Motor Vehicles Act of 1988, any commercial vehicle plying on Indian roads has to mandatorily have the minimum coverage of a valid third party insurance policy. If you do not have an active vehicle insurance policy, you may be seen as violating this law. If your policy has lapsed and you are stopped by the police and asked to provide the vehicle documents, it could lead to trouble. You may have to pay a hefty fine. If you fail to renew the policy repeatedly and the vehicle is caught the second or a third time without an active policy, it could mean an increased fine and even jail time.
- Your vehicle may be left without coverage
As a commercial vehicle owner, you may know how important it is to have a financial backup in case of unexpected events. A lapsed policy is not capable of providing coverage to your vehicle. So, if you have not renewed your comprehensive commercial vehicle insurance policy on time, you would have to shell out money for repairs from your own pocket in case of damage to the vehicle. In case of accidents where there has been serious damage to others, you may even have to incur serious legal liabilities. An active insurance policy can help you cover all these expenses.
- You may lose your NCB
The No Claim Bonus or NCB can be transferred from one policy period to another since it is cumulative in nature. It increases with each claim-free year. However, you can benefit from the NCB only if you renew the policy on time. If the policy is not renewed on time and has lapsed, you can risk losing the NCB. So, for instance, if you have an NCB of around 20%, do keep it in mind to renew the policy on time or it may reduce to 0%.
- Your business may suffer
A commercial vehicle is important for the smooth running of a business in many cases. It transports cargo, helps run errands, and can be a source of livelihood for some. If this vehicle is damaged and the expenses for the repair are heavy, it can lead to your business suffering for that period of time. With a valid commercial vehicle insurance policy, you can get your vehicle repaired at the best network garages and not have to worry about arranging cash. This ensures to a great extent that any unexpected event does not make that big of a dent in your business.
Many insurers do send a reminder when your policy period is nearing its end. Keep an eye out for these reminders and ensure to begin the renewal process right away after receiving the reminder. Avoid renewing the policy in a hurry. Whether you want to renew insurance for commercial vehicles or renew car insurance for your private use, always go through the policy wordings carefully and then proceed.