On Thursday, the Finance Ministry extended the deadline for renewal of health and third-party motor insurance policies to 15 May. The extension will be applicable to policyholders whose health and motor insurance policies were due for renewal between 25 March and 3 May.
The move comes as a relief to policyholders facing cash crunch during the nationwide lockdown to contain the spread of COVID-19.
With a view to mitigate hardship to policyholders whose health & motor (third party) insurance policies are due for renewal during COVID-19 lockdown, Govt. has issued notification allowing policyholders to make payments on or before 15.05.2020 towards renewal of their policies. pic.twitter.com/KauhDvovhf— NSitharamanOffice (@nsitharamanoffc) April 16, 2020
While health insurance policies generally allow a grace period of one month for renewal, the policy ceases to remain in force until renewed. In the case of third party motor insurance, the policy lapses if not renewed on the due date and the vehicle owner can become liable to pay penalty and compensation to the third party with their own money.
The extension of renewal comes as an important requirement to help these policies stay in force.
Earlier, the government had extended the deadline to 21 April for policies that were due between 25 March to 14 April. The extension of this deadline comes after the lockdown was pushed by the central government by another 21 days to 3 May 2020.