As a bike owner, your bike must always be insured with a two-wheeler insurance plan if you want to avail any financial aid or reimbursement from your insurance provider. To do this, you need to ensure the validity of your bike insurance policy.
The policy term plays a significant role in deciding whether or not you get the coverage or help needed in times of distress. Without a valid insurance plan, you must pay for all your bike repairs out of pocket, which is far from cheap.
This is why you must always stay on top of your bike insurance renewals. Insurance companies provide policyholders with a grace period for bike insurance renewal so that they have ample time to renew their plans.
What is a Break-In Period in Two-Wheeler Insurance?
A break-in or grace period in two-wheeler insurance is the time between policy expiry and policy renewal. This is a specific amount of time insurance companies give their policyholders to renew their insurance plans.
For example, Tata AIG’s grace period for bike insurance renewal is 90 days. So you must renew your bike insurance within 90 days after your policy expires.
What Happens if You Miss The Break-In Period for Two-Wheeler Policy Renewal?
Missing your two-wheeler insurance renewal grace period can result in a policy lapse. Unfortunately, this means you have to buy new insurance for your two-wheeler and repeat the entire application process.
Furthermore, missing the grace period can also result in several other consequences. Some of these are:
- Legal Liabilities
In India, bike owners are legally mandated to own a valid bike insurance policy under the Motor Vehicles Act. If caught driving without a valid two-wheeler insurance plan, you will be subject to fines, penalties, and other legal consequences.
Furthermore, if you are involved in an accident and the other person involved gets injured, you may be subject to legal liabilities. A two-wheeler policy takes care of all these issues, so it is recommended that you make your two-wheeler policy renewals on time.
Allowing the policy to lapse means you must redo the application process and buy a new two-wheeler insurance policy. This means the insurance company will have to re-inspect your vehicle, which could draw out the application process.
Policy lapses also mean higher insurance premiums on the following plans you purchase. It is best to renew your plan within the break-in period and do your bike insurance renewal online for a quick and simple renewal process.
- No Coverage
No valid insurance for your two-wheeler means no coverage – which means expenses incurred from major collisions, electrical or mechanical breakdowns, damage from natural disasters, or total loss of goods from theft will all need to be covered by you.
Furthermore, you are not covered during the two-wheeler insurance renewal grace period. It means that you have no insurance policy under your name. Therefore, you should either avoid riding your bike during this time or renew your two-wheeler insurance as soon as possible.
- No More No Claim Bonus
Lastly, missing your two-wheeler policy renewal time also means you are no longer eligible for a No Claim Bonus or NCB, even if you haven’t made any claim during the policy term. This means you will lose all the discounts you have accumulated, and none of them will be carried forward on renewal.
How is NCB Calculated?
To give you a better idea of NCB, here is a table outlining the discounts you could miss out on or lose if you fail to renew your two-wheeler insurance during the grace period.
|20% Discount After One Claim-Free Year
|25% Discount After Two Consecutive Claim-Free Years
|35% Discount After Three Consecutive Claim-Free Years
|45% Discount After Four Consecutive Claim-Free Years
|50% Discount After Five Consecutive Claim-Free Years
As you can see, the discount caps at 50% and is applicable only for consecutive claim-free years. This is important because missing your two-wheeler policy renewal can cancel these cumulative discounts. Also, while renewing your bike insurance, you can use a bike insurance calculator to calculate your premium by factoring in the NCB.
The grace period for bike insurance renewal can differ among insurance providers, so if you want to know the grace period for your two-wheeler policy renewal, it’s best to contact your insurer.
Similarly, suppose you buy new insurance for your two-wheeler from a provider like Tata AIG. In that case, using their bike insurance calculator to estimate your premium amounts and checking the grace period for bike insurance renewal is good practice.