Car Insurance Renewal: Process, Lapse Rules and NCB
Renew car insurance before it expires: there is no grace period for cover, but your no-claim bonus survives if you renew within 90 days.
Written by Rohan Mehta
Published 26 September 2026·7 min read
On this page9 sections
Renew car insurance before the expiry date, because cover stops the moment the policy ends. Driving without third-party cover breaks Section 146 of the Motor Vehicles Act, 1988, and a first offence can cost ₹2,000. Your no-claim bonus (NCB) survives a lapse of up to 90 days, so a late renewal costs you cover, not the discount.
Key facts
| Item | Rule |
|---|---|
| Third-party cover | Compulsory for any car used in a public place (Section 146, Motor Vehicles Act, 1988) |
| Penalty for driving uninsured | First offence: up to 3 months’ jail, ₹2,000 fine, or both. Repeat: up to 3 months, ₹4,000, or both (Section 196, as amended in 2019) |
| Grace period for cover | None; the car is uninsured from the day after expiry |
| NCB after a lapse | Lost if the policy is not renewed within 90 days of expiry |
| NCB scale | 20%, 25%, 35%, 45% and 50% of own-damage premium after 1 to 5 claim-free years |
| PUC certificate | Needed at renewal, under an IRDAI circular of 20 August 2020 |
| Own-damage (OD) cover | Annual; can be bought on its own since 1 September 2019, from the same or a different insurer |
| Owner-driver accident cover | Minimum sum insured of ₹15 lakh |
Renewing online: step by step
- Keep your current policy, registration certificate (RC) and a valid pollution under control (PUC) certificate ready.
- Open your insurer’s website or app, or another insurer’s if you are switching, and choose car insurance renewal.
- Enter the registration number or policy number and let the form fetch your details.
- Check the owner’s name, car model, fuel type and previous policy details against your RC.
- State truthfully whether you made a claim in the expiring year, since that decides your NCB.
- Review the insured declared value (IDV), add-ons, owner-driver accident cover and nominee.
- Pay the premium and download the policy schedule.
- Read the new start date and check that it follows the old expiry date with no gap.
If you bought the car new after 1 September 2018, it came with a three-year third-party policy. For renewals within those three years, you buy an annual stand-alone OD policy. IRDAI requires the OD policy to record the insurer, policy number and dates of your running third-party policy.
Details to check before paying
| Item | Details |
|---|---|
| IDV. | The IDV is the car’s sum insured and is fixed at the start of each policy period. IRDAI’s 2024 master circular requires each insurer to publish how it sets IDV and any depreciation scale, with an illustration. A low IDV cuts the premium but also cuts a total-loss payout. Our IDV guide explains the trade-off. |
| NCB. | Confirm the percentage shown matches your claim-free years. |
| Add-ons. | Each add-on’s premium must appear separately in the premium table, so you can drop the ones you do not need. See our page on zero depreciation cover before removing that one. |
| Owner-driver cover. | The compulsory personal accident cover for the owner-driver must be at least ₹15 lakh. It can be part of the motor policy or a separate one-year policy. |
| Nominee and contact details. | Update these so claim messages reach you. |
| Pay-as-you-drive. | IRDAI’s 2024 circular says customers may be offered a “Pay as you Drive” or “Pay as you Go” cover. Ask your insurer if it has one, especially for a car you rarely use. |
Expired policy: inspection and break-in rules
The period between expiry and renewal is often called a break-in. Two things happen during it:
- No cover. Any damage or third-party claim during the gap falls on you. Driving the car also breaks Section 146.
- Inspection at renewal. Insurers usually want to see the car before renewing a lapsed comprehensive or OD policy. HDFC ERGO, for example, sends a surveyor, or accepts a video of the car recorded on your phone and uploaded to its app.
After a lapse, the insurer may also price the policy differently. Do not drive the car to a garage or inspection point until at least third-party cover is in force.
Insurers also cannot renew a policy without a valid PUC certificate. IRDAI told them so on 20 August 2020, following the Supreme Court’s 2017 order in the M.C. Mehta case, as LiveLaw reported. Get the PUC check done first.
NCB after a lapse or on switching insurer
NCB is a discount on the own-damage premium, never on third-party premium. Insurers follow the scale and rules in GR 27 of the India Motor Tariff, and their current NCB pages, such as ICICI Lombard’s and HDFC ERGO’s, still apply the 90-day limit.
| Claim-free years before renewal | NCB on OD premium |
|---|---|
| 1 | 20% |
| 2 | 25% |
| 3 | 35% |
| 4 | 45% |
| 5 or more | 50% |
| Item | Details |
|---|---|
| Lapse of 90 days or less. | You keep the NCB earned on the expired policy. |
| Lapse of more than 90 days. | NCB is lost and the scale restarts. The exception is a car you sold and did not replace, or laid up. There, NCB can apply to a fresh policy taken within three years of expiry. |
| A claim in the year. | The scale depends on no claim being made or pending, so a claim normally resets NCB at the next renewal. An NCB protection add-on can keep it; National Insurance’s version keeps the NCB for up to two claims. |
| New car. | NCB belongs to you, not the car, so it can move to a replacement car of the same class. |
Our NCB guide covers the rules in more detail.
Switching insurer at renewal
You can move to any insurer at renewal. Give the new insurer proof of your NCB, such as the renewal notice or a letter from the old insurer. Without that, GR 27 lets the new insurer accept a signed declaration that no claim was made. If the declaration turns out to be false, you lose own-damage benefits under the policy.
The new insurer then confirms the NCB with your old one, so do not overstate it. For a car still inside a three-year third-party term, only the OD part moves; the third-party policy stays where it is.
Before you switch, compare how each insurer handles claims. Our guide on how to file a motor claim shows what to check.
Renewal premium rose? What drives the change
| Item | Details |
|---|---|
| Third-party premium. | The central government fixes the base rate under the Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022, and amends it by notification. It is the same at every insurer, so shopping around will not lower it. |
| Loss of NCB. | A claim or a lapse of more than 90 days removes the discount. |
| IDV and pricing. | The OD premium depends on the IDV and the insurer’s own rates. |
| Add-ons. | New or renewed add-ons are listed separately in the premium table. |
| Changes to the car. | A CNG or LPG kit carries extra premium, so tell the insurer if one is fitted. |
Ask the insurer for the premium break-up if the jump is not explained. If you think you were overcharged or wrongly denied NCB, complain to the insurer first. IRDAI’s rules give it 14 days to resolve the complaint.
Frequently asked questions
Is there a grace period for car insurance renewal?
Not for cover. The car is uninsured from the day after expiry; the 90-day window only protects your NCB.
What is the fine for driving without car insurance?
Under Section 196 of the Motor Vehicles Act, a first offence can bring up to three months’ jail, a ₹2,000 fine, or both. A repeat offence can bring a ₹4,000 fine.
Can I renew car insurance online after it has expired?
Yes, but for OD or comprehensive cover the insurer will usually inspect the car first, by a surveyor or by a video you upload.
Do I lose my NCB if I switch insurers?
No. NCB stays with you; show the old policy or renewal notice to the new insurer.
Is a PUC certificate needed to renew car insurance?
Yes. IRDAI has told insurers not to renew a motor policy without a valid PUC certificate.
Why did my third-party premium not change when I switched insurers?
The central government sets the third-party base premium, so it is the same with every insurer.
Sources
- Motor Vehicles (Amendment) Act, 2019 (Sections 146 and 196) — Gazette text via PRS Legislative Research (checked 16 Sep 2026)
- Section 196, Motor Vehicles Act, 1988 (original text) — Devgan.in (checked 16 Sep 2026)
- Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022 and amendment — Ministry of Road Transport and Highways (checked 16 Sep 2026)
- Master Circular regarding Motor Insurance products, 8 June 2020 — IRDAI, copy hosted by Avantis (checked 16 Sep 2026)
- Master Circular on Protection of Policyholders’ Interests, 2024 — IRDAI, copy hosted by CAalley (checked 16 Sep 2026)
- India Motor Tariff (GR 27, No Claim Bonus) — copy hosted by Cholamandalam MS General Insurance (checked 16 Sep 2026)
- No Claims Bonus Protect terms — National Insurance Company (checked 16 Sep 2026)
- No Claim Bonus in car insurance — ICICI Lombard (checked 16 Sep 2026)
- Renew expired car insurance — HDFC ERGO (checked 16 Sep 2026)
- PUC certificate must for renewal of motor insurance, IRDAI tells insurers — LiveLaw (checked 16 Sep 2026)
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