Hi,
Generally Non-life Insurance Policies are annual policies/contarct.
To be more simple it is a renewable contract on yearly basis.
Example:
Policy period- 01.01.2009 to 31.12.2009 midnight (expiry date)
Renewal date - 01.01. 2010 to 31.12.2010 but remeber, the renewal premium has to be submitted with the insurers on or before 31.12.2009 i.e the last day of expiry of the policy. or policy will be treated to be a fresh policy and renewal benefits may not be granted. In personal class of policy like motor, personal accident, relaxations are given as a special case and the benefits may be extended if the previous policy is renewed within 7 days from its date of expiry.
Now, coming back to why actually non-life insurance policies are made renewable on yearly basis; The reason being a lot of changes / modification may take place with the passage to time and the contract of insurance is to reviewed every time in the light of that present changes/modifications, to asses the risk profile and then only to accept the policy (underwriting).
2nd Example :
On 1st January 2009, I purchased a car in my name and sold the car to some one else on 30th December 2009.
The renewal date of this Motor policy in the usual manner will be due on 31st December 2009 midnight. and the next policy year will start from 01.01.2010 and end on 31.12.2010.
But remember to maintain the policy continuity /renewal without any break the insured has to renew the policy either on the same date of expiry of the policy (31.12.2009) or some day in advance, otherwise, the policy is treated as fresh policy.
Please also note that in this present case the ownership was change at the time of renewal and it may also happen that the owner gets the registartion of the car done with some other state /jurisdiction then that of previous one i.e with another RTA; in both case, the changes are to brought in the notice of the insurance company so that they may underwrite the buisness in the light of that present fact and accordingly fix the sum insured, Policy terms, conditions, warranties, exclusions and charge premium rates.
IBS
