India's Finance Minister, Nirmala Sitharaman has announced relief for those whose automobile and health insurance policies are up for renewal. People who had health and third party auto insurance policies expiring between March 25, 2020 and May 3, 2020, can now get their insurance renewed till May 15, 2020. The extension of insurance renewal was announced because the COVID-19 lockdown has now been extended till May 3, 2020 because it became difficult for people to renew their policies. Insurance providers will continue to provide the policy cover from the original due date. The relief measures were announced via two separate notifications from the Finance Ministry.
With a view to mitigate hardship to policyholders whose health & motor (third party) insurance policies are due for renewal during COVID-19 lockdown, Govt. has issued notification allowing policyholders to make payments on or before 15.05.2020 towards renewal of their policies. pic.twitter.com/KauhDvovhf
— NSitharamanOffice (@nsitharamanoffc) April 16, 2020
Also Read: IRDAI To Keep Third Party Motor Insurance Premium Unchanged For All Vehicles In FY21
The Society Of Indian Automobile Manufacturers (SIAM) had requested the Insurance Regulatory And Development Authority of India (IRDAI) to not revise the third party motor insurance charges for FY2021. The IRDAI has accepted the submission and will be retaining its premium rate for the financial year. The support will have a multiplier effect as increase in premium would have resulted into thrice the increase in premium. Buyers are now required to pay a onetime premium for three years. This would have suppressed consumer sentiments further at a time when it's already low given the prolonged slowdown.
This is for policies that are due between 25th March and 3rd May, in order to ensure their continuity and hassle-free claims payment during the above grace period.
— NSitharamanOffice (@nsitharamanoffc) April 16, 2020
Also Read: Why It Is Prudent To Renew Auto Insurance
Plus renewing your motor vehicle insurance policies has several benefits such as No Claim Bonus (NCB). One might also have to pay late fees or inspection fees should the policy lapse. In case you choose not to renew your vehicle insurance policy, and should some situation arise where you need to take your vehicle out, then it will be a problem, because it is illegal to drive car or ride a two-wheeler without insurance. Secondly, in case there is some damage to the vehicle till the time you are not able to get your insurance renewed, you will have to bear the complete cost of repairs by yourself.
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