When your Road Tax start date and Car Insurance start dates are not aligned (not the same), you may face some inconvenience… LTA may even prevent you from renewing your Road Tax if you have insufficient insurance coverage.
If you’re in this situation, these tips may help:
Scenario #1. Insurance Renewal Date is More Than 60 Days After Road Tax Start Date
Insurers don’t offer quotes for motor insurance start date beyond 60 days from today. This means there’s no way you can compare alternative (other insurer’s) quotes.
If you’re in this situation, you’ll have to extend your insurance coverage.
Scenario #2. Insufficient Insurance Coverage
This is the most common situation. LTA only allows you to renew your road tax if you have sufficient insurance coverage, thus you have to resolve this early. Otherwise you may get slapped by a late renewal penalty.
You may make up the shortfall by getting the insurer to extend the coverage (and remember to align it with road tax date).
OR… If you’re offered a good rate from another insurer, you may cancel your existing policy up till (and including) the current Road Tax Expiry date. After that, take up a new car insurance policy from there.
Please take into consideration (i) the cancellation refund you’ll be getting, and (ii) the savings in premium, making sure there is sufficient financial benefit before jumping on this path.
Different insurers adopt different formulas to calculate cancellation refund rates, so it’ll be good to (at least) get a ball-park figure from the insurer to arrive at a good estimation.
Scenario #3. Road Tax Expiry Date Comes BEFORE Insurance Expiry Date
In this case, you can renew your road tax because there’s enough insurance coverage. This type of mis-alignment won’t give you any headaches.
Finally, please note that your NCD do not increase when you do an extension. Putting together all the factors below, you can figure out the option that’s best for you:
a) Road Tax & Insurance Expiry Dates,
b) Cancellation Refund Amount (if applicable),
c) Savings in Premium, and
Alternatively, get us to help analyze (we’ll be happy to help).