Car Insurance| 4 Things to Do if It Lapses

What to Do if Your Car Insurance Has Expired

Reading time: 3 mins

As you already know, your car insurance needs to be renewed every year. And it is important that you do because your car insurance policy – depending on whether Comprehensive, Third Party Fire & Theft (TPFT) or Third Party Only (TPO) – offers protection against accidental damage to your car, fire, theft, as well as third party liability in the form of death, injury and property damage. 

Renewing your car insurance before the due date is not just important, but also necessary because failure to do so will not just lead to the expiry of your insurance but could also cause a lot of other complications. 

For one, you’ll have to buy a whole new insurance policy for your vehicle. Besides that, you may also lose all the benefits of your previous accounted years like your “No Claim Discount”  (NCD) if the policy is not renewed.  Most insurers offer a grace period of 1 year in accordance with the guidelines of the General Insurance Association Of Singapore (GIA). However, DirectAsia offers a grace period of 2 years to reinstate your original policy.

In this article, we discuss the consequences of expired car insurance and what to do if that happens. But of course, it’s best to prevent your car insurance from lapsing in the first place. 

What Happens if Your Insurance Policy Has Expired?

Here are some other consequences of not renewing your car insurance policy on time:

• Legal Consequences

You are legally not allowed to drive in Singapore without valid car insurance. If you’re caught driving an uninsured car, you can face strict legal action and end up paying steep fines. 

The Singapore Motor Vehicles (Third-Party Risks and Compensation) Act stipulates that someone found driving a motor vehicle in Singapore without insurance against third-party risks can be fined up to S$1,000, face imprisonment for up to 3 months, or both. If you're convicted of this offence, you'll also be disqualified from holding or obtaining a driving license for 12 months from the date of your conviction.

• Higher Premium Costs

Another risk you run by letting your car insurance coverage lapse is an increase in your premium rates. If the period between the policy lapsing and getting it renewed is significant, you could end up paying a much higher premium or the renewal may be rejected altogether.

• Monetary Liability 

The biggest risk of not having car insurance coverage is if you are involved in an accident. There could be liabilities resulting from driving an uninsured vehicle, such as risk to your life as well as other motorists, plus injury and damage to your car and other vehicles on the road. 

This means that you will have to pay for damages to property and for medical expenses from your own pocket. 

Now, let us move on to the main part of the article, what can you do if your car insurance has expired.

What to Do if Your Car Insurance Has Lapsed?

1. Contact Your Insurer

The first step is to contact your car insurance company. Your insurer may still offer a grace period for a standard renewal of your lapsed policy. If not, you will have to apply for a new auto insurance policy. 

But if you are considering switching insurance providers, this could be a good time to do so. Compare car insurance online and select one that offers the best deal at a competitive premium.

2. Prepare All the Necessary Documents 

Next, sort out the documents and papers of your lapsed car insurance and keep them handy. You should also include papers, bills, receipts, and other details of any past claims in this documentation. 

Some of the important documents and vehicle details that should go into this file include:

• Your personal identification details 
• Your driver’s license
• Your car’s Registration Certificate (RC)
• Your lapsed car insurance policy document

3. Get Your Policy Premium Recalculated

After you inform your auto insurance provider of your lapsed policy, they should provide you with a new option after recalculating your premium. Make sure to check all the details of the new policy against your lapsed car insurance to ensure that you get the same coverage. Of course, you could choose other Optional Benefits if required and check if there are any current discounts or promotions that could be applied to your new policy.

You should also check whether your insurer can carry forward the No Claim Discount (NCD) from your lapsed policy. Insurers may grant this request if you’re a loyal customer, so it pays to check.

4. Opt for A New Recommended Policy

Finally, it’s up to you to opt for an entirely new car insurance policy or reinstate one that is similar to your lapsed policy. 

Choose a policy that suits you and only pay for what you need. Here are a number of ways you can cut costs on your premium:

• Decide on the level of cover according to your needs
• The higher the excess you choose to pay, the lower the premium (only for Comprehensive)
• Select only the options you need

Be On Top of Your Car Insurance Policy

The best way to avoid a gap in coverage and to make sure you’re protected is to keep continuous coverage and avoid your car insurance from lapsing. Pay your monthly premiums on time and make sure you know the end date of your policy. 

You should be able to set up automatic payments and have your policy automatically renewed. If you switch insurance companies, make sure to time the start date of your new policy with the end date of your old policy so there is no lapse.

Always bear in mind that if you fail to renew the policy before its expiry date, the policy will lapse. And a lapse in your car insurance policy is best avoided because uninsured vehicles could put you at financial risk should you be involved in an accident or mishap.
However, the good news is that with DirectAsia you can easily renew your auto insurance policy right from the comfort of your desk by submitting your request online. So avoid the consequences of a lapsed policy by ensuring you renew your car insurance on time!