5 Common Car Insurance Myths
When it comes to car insurance myths, there are plenty making the rounds. Believing them to be true, many either refrain from buying a car insurance policy (which, by the way, you are legally required to have if you own a car) or miss out on availing its various benefits. The myths and misconceptions surrounding car insurance are the reason why people fail to make the best use of their insurance cover.
In this article, we will attempt to debunk the top 5 myths associated with car insurance, so that you will know how exactly the policy works.
Myth 1 - My car is old so I don’t need to insure it
Truth - Car insurance is not an option. Even if your vehicle is old, the law states that it must be insured.
The Motor Vehicle Act of 1988 makes it mandatory for every car plying on the Indian roads to be insured. There are no exceptions, whether your car is old or new, you need to get insurance for it. You will be charged a fine if you are caught driving without insuring your vehicle, and worst comes to worst, you could face some jail time.
Even if your car is old, it doesn’t mean there aren’t any threats facing it. Old cars are generally easier to steal. Additionally, there is a large demand for their parts. After stealing the car, thieves often take the car apart and sell its parts. So given that your old car has value, the best thing to do is insure it.
Myth 2 - Red cars cost more to insure
Truth - The colour of your car has nothing to do with your premium rates.
The colour red is definitely more eye-catchy, but that does not mean it will have any bearing on the rates that you pay. The insurance company will take into consideration the make and model of your car while determining the premiums, but not its colour. So go ahead and choose your favourite colour, don’t worry about it affecting the premium rates in any way.
Myth 3 - Transferring my policy to another insurer could cost me my no claim bonus
Truth - Your no claim bonus stays even when you shift your policy from one insurance company to another.
If you do not know what NCB is, well, it is a discount you get for every year you do not make a claim. The amount is rather substantial, and it gets accumulated year after year, provided that you do not make a claim. Now, although the NCB stays even when you transfer your policy from one provider to another, see to it that you file for it within ninety days of the expiration of your old cover, or else the accrued benefit gets lost.
Myth 4 - Car insurance only covers accidents
Truth - Comprehensive car insurance policy also covers non-collision damages, theft of vehicle, etc.
Yes, car insurance covers your losses in case your car is involved in an accident. With a comprehensive car insurance policy, you will be protected against losses or damage caused to your car from natural and man-made disasters. Damages caused by fire, earthquakes, flood, riot and incidents like theft of vehicle will be covered by the insurance company. Make sure to read the policy documents carefully to see what kind of natural and man-made disasters will and will not be covered.
Myth 5 - All insurance companies offer the same rates
Truth - Car insurance rates vary quite a bit among insurance providers.
When you’re shopping for a car insurance policy, you will find that insurance companies charge different premium rates for insuring the same vehicle. This is because every insurer will have their method of calculating risk. Say, if an insurance company receives a large number of claims from owners of a particular car brand then the insurer may charge higher rates for extending coverage to people with similar vehicles. So before buying an insurance policy for your vehicle, make sure to compare the rates offered by each insurance provider for covering your vehicle.
Before buying any car insurance policy, you must research about its features, benefits, costs, etc. So that when a product is presented to you, you will be able to easily tell if what is communicated to you is true and honest. We hope this article has helped you understand car insurance better and cleared any misconceptions you may have had about insuring your vehicle. If you have any doubts or queries, do write them to us in the comments section below or drop us an email at email@example.com.