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Insurance expiring during lockdown can be renewed later but will you remain covered?

Insurance expiring during lockdown can be renewed later but will you remain covered?

Insurance expiring during lockdown can be renewed later but will you remain covered?
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By Anshul  Apr 16, 2020 8:01:36 PM IST (Published)

As per the existing rules of health insurance, if policy holders fail to pay premium on or before the renewal dates, they are given a certain grace period to pay it.

The government recently extended the renewal dates of health and motor insurance policies falling during the nationwide lockdown period till May 15 to ensure continuity. This extension is for policies that are due for renewal between March 25 and May 3.

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This means that the existing policies which are due for renewal during the lockdown can be renewed till the middle of the next month.
As per the existing rules of health insurance, if policyholders fail to pay premium on or before the renewal dates, they are given a certain grace period to pay it. In this case, renewal dates for policies have been extended to  May 15.
But experts point out that the while policy can be renewed by paying the premium during this grace period, policyholders will not be covered during that period.
"For health insurance, this means that benefits like no claim bonus will not be taken away by the insurer on failing to pay the premium on due date and the continuity of the policy will be maintained. But the policyholders will not be covered for claims arising after the last date mentioned in the contract failing to pay the renewal premium," explains Pankaj Chauhan, MD & CEO, EPOCH Insurance Broker.
In the case of third-party motor insurance, however, continuity has been granted. That is, delayed payment will ensure continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal. Any valid claim triggered during the grace period can be paid, according to government's notification.
The same relief though has not been extended to comprehensive motor insurance policies, warn experts.
"Customers with comprehensive motor insurance policies should renew before its expiry itself so that they need not go through the vehicle inspection process, possible increase of premium and loss of no claim bonus (NCB)," explains Sajja Praveen Chowdary, Head - Motor Insurance, Policybazaar.
"The notification mainly helps people who generally opt for Third party cover only and are facing hardship on the money front or process front for now. The notification does not affect most of the private vehicles as most private vehicles have a comprehensive motor insurance policy that includes own damage cover also," he adds.
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