In India, owning a four-wheeler without a comprehensive car insurance policy can be financially risky. This is because the road conditions in the country aren’t up-to-the-mark. Also, the poor infrastructure and congestion everywhere make it difficult to drive in peace.
So, if you get involved in an accident or road rage and end up damaging your car and getting injured, 4-wheeler insurance can provide you with a financial cushion. Not only this, but a car policy online in place can save you from financial losses sustained due to natural calamities and man-made disasters as well.
However, when it comes to understanding the technical jargon related to car insurance renewal and purchase, we are often confused. So, it’s important to learn about the technical terms and comprehend exactly what you are signing up for.
And in this article, we will talk about the break-in period in car insurance and everything related to the same.
Break-in Period in Car Insurance – Definition
The break-in period occurs when the policyholder cannot renew their car policy online on time, leading to its lapse. According to the Motor Vehicles Act, 1988, every Indian car owner should have their vehicles insured with at least third-party insurance. So, in case of a break-in period, the insured must contact the insurer to renew the car insurance policy. Also, the policyholder should carry out the car insurance renewal within 90 days of break-in to avail of the no-claim bonus accumulated from the previous policy term.
Let’s understand this better with an example. Suppose your car insurance policy expires on 30th January and you renew it on 11th February. You will have ten days of gap between the expiry date and the renewal date where the insurance policy will remain inactive. These 10 days are called the break-in period.
A Few Myths About Break-in Car insurance
Here are a few common myths related to the break-in period and how you need to respond to those.
- You can raise claims during the break-in period
The reality is, your car insurance policy will remain inactive during the break-in period. And hence, you won’t be able to raise any claims during this time. While you will have 90 days to renew your policy, you will be ineligible to raise claims.
- You cannot renew the policy during the break-in period, and you will have to buy a new plan.
This is false. You can renew the insurance policy during the break-in period and can continue with the same policy. However, while renewing the plan, you will lose the No Claim Bonus benefits if you do not renew the plan within 90 days of its expiry date.
- You cannot avail of the NCB (No Claim Bonus) discount that you will receive on the renewal premium for not raising any claims during the previous insurance policy period.
You can take advantage of the No Claim Bonus if you renew the insurance plan within the 90-day break-in period.
What Happens If You Don’t Renew the Insurance Policy During the Break-in Period?
Most of the insurers in India like Tata AIG offer a grace period of 90 days for car insurance renewal. During which one has to renew the 4-wheeler insurance policy. Usually, this is the maximum time allowed by an insurer to renew a policy online. During this 90-day break-in period, the insured is still eligible to avail of the No Claim Bonus (NCB) benefits, which can reduce the policy premiums upto 50%.
However, once this break-in period of 90 days is over, the insured will lose every accumulated policy benefit. Also, the car insurance policy will lapse. And therefore, the insured will again have to buy new car insurance, where the insurer will decide the IDV of the car after re-inspecting the same.
So, if you buy an insurance policy after the 90-day break-in period, it will be treated as an all-new car insurance policy, and all your previously collected NCBs and discounts will expire.
Drawbacks of Break-in Period in Your Car Insurance Policy
Now that you know what a break-in period in car insurance is, let’s find out more about the drawbacks of a break-in period in an online car insurance policy.
- Legalities: If you drive during the break-in period, you will be in a legal soup. So, it is mandatory to have active insurance with a Third-party insurance company to drive on the Indian roads. According to The Motor Vehicles Act, 1988, every car owner should have at least a third-party insurance policy for cars to be able to drive.
Hence, if you are out with your car without a valid insurance policy in place, Indian law will levy financial fines upon you. Also, in case you get involved in an accident with your car, where a third party is injured, you will face strict legal consequences.
- Financials: The primary objective of an active car insurance policy is to protect your finances, and avoid monetary losses during accidental damage. So, if your car gets damaged during this 90-day break-in period, you will have to bear every cost from your pocket.
Conclusion
So, if you have an active insurance policy for your car, make sure that you renew it on time. If you are purchasing a car anytime soon, make sure that you go through the car insurance price list from all reputed insurers in India and choose the one that suits your needs. The car insurance online quotes will also help you to understand your premiums better.
