Busting the 7 Common Myths about Car Insurance

Unsplash/Nick Agus Arya

It cannot be said enough times that car insurance is something that is must for every car that is driven on the Indian roads. It has been made mandatory under the Motor Vehicle Act of 1988, but still, you won’t have to go far in India to run into people who ignore the law and keep driving uninsured vehicles. Apart from the fact that it is illegal to drive an uninsured car, motor insurance policies like car and bike insurance provide a number of benefits that make it worth the expense.

There might be a number of reasons why people fail to buy proper insurance for their cars, but one of the common factors that play a major role in this is that there are still a number of misconceptions that surround the idea of car insurance. Before people can be convinced to purchase proper motor insurance, it is important that we get rid of some of the myths that surround it. Here is a list of the 7 most common car insurance myths that need to be busted today:

Myth 1: If your car is old, you don’t need car insurance.

Reality: It is still mandatory by law.

As already mentioned, it is mandatory by law to keep your car insured against at least third party liabilities, regardless of how old it is. However, if you feel that it isn’t worth the money, there is a rule of thumb that you may follow. As long as the present value of your car is more than ten times the car insurance premium you are paying, it is worth getting the comprehensive cover. If not, you can opt for the minimum third party liability insurance, which is also much more affordable in terms of car insurance premium, as compared to comprehensive covers.

Myth 2: It is so cumbersome to buy car insurance.

Reality: The process of purchase and renewal has never been easier.

Nowadays, you can easily buy car insurance online, which has simplified the entire buying and renewal processes for all kinds of insurance policies. All you need to do is visit the website of an insurance provider and enter some details about your car. The provider will display instant quotes about the car insurance premium that you will be liable to pay. After this, there are a few more super easy steps that you need to follow to get your policy activated and delivered to you via email, and later to your address as well.

Myth 3: If I transfer my policy to a new insurance company, I will lose my No Claim Bonus.

Reality: Your No Claim Bonus stays with you.

No Claim Bonus is a special reward that you receive in the form of a discount on the car insurance premium for good driving. Basically, if you have made no claims during the previous policy year, you are liable for this discount. It’s a cumulative discount, so it keeps increasing after each claim-free year. Luckily, even if you change your insurance company, your No Claim Bonus will also be transferred with the policy. The only stipulation here is that you need to apply within 90 days or so of the expiry of the old insurance. So, timely renewal is pretty important.

Myth 4: You only get insurance coverage in case of an accident.

Reality: Coverage of a car insurance policy is much more comprehensive.

Yes, you are provided coverage in case of an accident, but car insurance also covers the loss that you might incur because of causes that are out of your control. This includes several situations,like natural calamities (earthquake, lightning, landslides, floods, etc.) as well as man-made disasters (damage in transit, terrorist activities, riots, theft, burglary, etc.).

Myth 5: Inconsistencies plague the entire process of putting in a claim for car insurance.

Reality: It’s actually a pretty straightforward process.

All you need to do is log on to the website of your insurance provider or call their toll free number. Once you have submitted the claim form, you can also keep track of the progress online. Once your claim has been registered, someone from the insurance company will contact you about the next part of the process, which will be document submission. The best part is that you can access assistance at every stage of the process. You can go through the FAQs on the website, or you can get in touch with the customer care team.

Myth 6: If I get into an accident, I will have to pay for expenses from my pocket and then go through the hassles of putting in a claim.

Reality: You can either opt for cashless services or for reimbursement afterwards.

As long as you visit a garage that comes under the list of network garages of your insurance company, you can opt for cashless services. This means that your insurance company will directly settle the amount payable with the garage. It is if you were unable to visit a network garage for some reason that you will have to bear the bill and then claim reimbursement later.

Myth 7: In case my car crashes, I will receive a claim amount that is equivalent to the amount of a new car.

Reality: That’s not how claims or insurance work.

The insurance amount is governed by the principle of indemnity. The amount you get in case of a total loss will be equal to the market value of the car at the present time, and not when it was new. Depreciation will be deducted on your car when the value of loss is calculated.

Unlike what people think, buying a comprehensive car insurance does not have to be a tricky process. All you need to do is find an insurer that is willing to answer all your questions and to guide you through the process.