Renewal date of health, motor insurance policies further extended to May 15

The Ministry of Finance issued a notification on April 15 stating that health and motor insurance cover renewal dates that fall between March 25, 2020 and May 3, 2020 have been further extended till May 15, 2020 due to the coronavirus lockdown.

This means that if your current compulsory third-party insurance policy is expiring between March 25, 2020, and May 3, 2020, and you are not able to renew your policy because of the country-wide lockdown, then you can renew it by May 15, 2020.




According to the notification issued by the Ministry of Finance, “The policy holders whose motor vehicle third party insurance policies fall due for renewal during the period on and from the 25th March, 2020 up to the 3rd May, 2020 and who are unable to make payment of their renewal premium on time in view of the prevailing situation in the country as a result of Corona Virus disease (COVID-19), are allowed to make such payment for renewal of policies to their insurers on or before the 15th May, 2020 to ensure continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal, so that any valid claim triggered during the grace period can be paid.”

Sajja Praveen Chowdary, Head - Motor Insurance, Policybazaar.com said, "This is a move by the government specially for customers with third party only policy. So, people should understand that this is not applicable for comprehensive motor insurance policies and is restricted to third party policies only."

He further said that most of the policies sold for private cars are comprehensive policies and needs renewal. However, if they are not renewed before expiry, it may lead to higher premium, loss of No claim Bonus (NCB) and will also need inspection of the vehicle. "Therefore, it is advised that the customers who have third party insurance policies and aren't able to afford the premium in such hard times can postpone but, others should renew on time to ensure they don't undergo further troubles later," he said.

Similarly, if your health insurance policy is expiring and is due for renewal in the period from March 25, 2020, to May 3, 2020, you can renew your policy by May 15, 2020.

According to the notification issued by Ministry of Finance, “The policy holders whose health insurance policies fall due for renewal during the period on and from the 25th March, 2020 up to the 3rd May, 2020 and who are unable to make payment of their renewal premium on time in view of the prevailing situation in the country as a result of Corona Virus disease (COVID-19), are allowed to make such payment for renewal of policies to their insurers on or before the 15th May, 2020 to ensure continuity of the health insurance cover from the date on which the policy falls due for renewal, so that any valid claim triggered during the grace period can be paid.”

Earlier, the ministry had extended the renewal date for policies that fall in the period from March 25, 2020 to April 14, 2020 till April 21, 2020.

Importance of the extension
This extension is important because normally these insurance policies cease to be in force if not renewed on the renewal date. Generally, in case of health insurance, there is a grace period for renewal, but the policy is not in force during this time period till renewed. Normally, third party motor insurance lapses if it is not renewed on the due date and the vehicle owner can become liable to pay penalty and third-party damage compensation, both from his own pocket.

In case of health insurance, if a policy holder fails to pay the premium by the renewal date, he/she gets a certain grace period to pay it. The policy can be renewed by paying the renewal premium during this grace period. However, during the grace period (till policy is renewed) the policyholder is not covered/insured and cannot file any claim for any medical or health event/accident/treatment taken during the grace period. Also, the insurance company can ask the insured to undergo a medical test/check up before renewing the policy during grace period.

Failing to renew third party insurance policy on due date
Normally, if you don't renew your third party insurance on the due date then the policy expires. If this happens then you can be fined Rs 2000 for driving a vehicle without third party insurance under the Motor Vehicles (Amendment) Act. Worse, in case of damage to a third party -some else's car, property - or death of a third party (person) during the period when the 3rd party insurance is not in force, you would be liable to pay entire compensation on your own.

Failing to renew your health insurance policy on due date
Normally, if you fail to renew your health insurance policy on time, a 15 to 30-day grace period is provided to pay the premium dues. If still you have not made premium payment within the grace period, then your policy lapses. After that you will have to buy a new policy which will not include any of your earned bonuses (like No Claim Bonus) and moreover, you will have to go through a waiting period for certain illnesses again. Hence, you must remember to renew the policy on or before the due date.