The Coronavirus pandemic has shut down the world. This pandemic was first reported in Wuhan, China on New Year’s Eve of 2020. As a precautionary measure, the government of several countries have implemented lockdown. The Indian government also implemented lockdown on its people from 25th March 2020 to 14th April 2020, which was further extended to 3rd May 2020, due to the increase in the cases of the infected patients.
In all the bad news that is circulating across the nation, a notification issued by the Ministry of Finance on 15th April 2020, might work as a ray of light in the time of darkness. The notification brings the good news for the policyholders whose health or car insurance cover renewal dates fall between 25th March 2020, and 3rd May 2020. The notification stated that the renewal of car insurance and health insurance has been further extended till 15th May 2020 due to the countrywide lockdown.
Ministry Of Finance On Third Party Motor Insurance Policy
On 15th April 2020, a notification was issued by the Ministry of Finance that says, policyholders whose motor vehicle third party insurance policy’s renewal date falls during the period of lockdown [i.e. between 25th March and 3rd May 2020], and who are not able to make payment of their renewal premium due to lockdown, are allowed to make payment for renewal of their policies to their insurers on or before the 15th May 2020.
This will ensure the 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 prompted during the grace period can be paid.
One should know that this extension to renew car insurance is only for the customers with third party policy. So, it is not applicable to the comprehensive car insurance policy and is only restricted to third party policies. The policyholder of a comprehensive two-wheeler or car insurance should renew on the due date to ensure nothing hinders their coverage.
You should know that earlier 21st April 2020, was the last date of renewal of motor insurance and health insurance, but due to the extension in the lockdown period, the ministry decided to extend it to 15th May 2020. So, keep yourself updated with the Ministry of Finance, as this renewal date might further get extended, depending on the situation in the country. Give below is the importance of this extension on policyholders.
Importance Of The Extension
Normally, third-party motor insurance lapses if it is not renewed on the renewal date, and the vehicle owner might become liable to pay penalty and third-party damage compensation under the Motor Vehicles Act from his/her own pocket.
If policyholders can’t pay on time, it might lead to a higher premium, loss of No-Claim Bonus [NCB], and will also need an inspection of the vehicle. This extension of renewal date will help enormously in these hard times as policyholders can pay renewal premium on or before 15th May 2020.