Relief! Government extends deadline for motor, health insurance

Providing some relief to the common man amid the ongoing coronavirus outbreak, the Centre has extended the deadline for renewal of third party motor insurance and health insurance policy holders. The renewal dates of health and motor insurance policies which fall during the period of March 25 to May 3 are now extended till May 15, the Finance Ministry said in a notification.

The latest development means that the existing policies which are due for renewal during the lockdown can be renewed till the middle of the next month. In normal circumstances, the policy is ceased if you fail to pay premium on or before the renewal date.

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.

The latest notification means that the policy will remain operational even if the policyholders pay on or before May 15. For third party motor insurance, if the customer fails to renew it on time, there is no grace period.

In fact, a penalty of Rs 2,000 can be charged for driving a vehicle without third party motor insurance

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 changes have been made in view of the prevailing situation in the country due to Covid-19 disease and consequent 19-day extension of national lockdown from April 15 to May 3, 2020. The latest changes in compliance measures for insurance customers had come after finance ministry allowed similar deferral in performance of statutory duty in respect of direct tax and indirect tax last month.