The government on April 16 extended the deadline for renewal for health and motor insurance policies to May 15.
A finance ministry notification said the extension is applicable for the policyholders whose health & motor (third party) insurance policies were due for renewal between March 25 and May 3.
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 policyholders 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.”
In case of health insurance, the policy holder usually gets one month to pay the renewal premium. The policy can be renewed by paying the premium in this grace period but the policyholders are not covered during that period.
If the policyholders pay on or before May 15, the health insurance policy will continue to remain in effect from the date on which the policy falls due for renewal.
For third party motor insurance, if the customer fails to renew it on time, there is no grace period. In fact, a penalty of ₹2,000 can be charged for driving a vehicle without third party motor insurance. According to Section 146 of the Motor Vehicles Act, 1988, third-party (TP) insurance is mandatory for you to be able to drive on roads.
The (delayed) payment will also “ensure continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal,” finance ministry said in a notification. Any valid claim triggered during the grace period can be paid, ministry added.
The move aims to give policyholders some relief during the nationwide lockdown to contain the spread of COVID-19.
