Six Myths About Vehicle Insurance Busted

Let’s tackle some misconceptions about motor insurance that don’t let you make the most of it

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Often, there’s a thin line separating fact from fiction, and vehicle insurance is one area where the line is mostly blurry. There are so many ideas we have about car insurance or bike insurance, but are these true? Sometimes what we assume to be true is actually just a misconception, and this is mainly due to lack of awareness about vehicle insurance. Here are some common myths that we want to bust so nothing stops you from making the most of your car insurance.

1) Vehicle Insurance Is Only For People Who Don’t Drive Carefully

“I don’t need car insurance. I’m a very careful driver”. How many times have you heard someone say this? Next time someone says this to you, congratulate them and tell them they would still need car insurance because it is mandatory. According to Motor Vehicles Act, third party car insurance is mandatory for vehicle owners. So whether you are a careful driver or a reckless one, you would still car insurance. Although, if you are the latter, we recommend that you brush up on your driving skills before taking the wheel.

2) Vehicle Insurance Is Expensive

So, you recently purchased a new car after saving up for it quite some time. You only purchased a third party insurance because you believe that comprehensive car insurance is expensive, and you might end up wasting money because you would never really make any claims. However, you get involved in a road accident in which your car is badly damaged. Thankfully, nothing happens to you, but the garage where you sent your car for repairs presents you a bill of Rs 2 lakh. You will have to foot this bill as you only have third party insurance. You only wish that you had spent a little more money and purchased comprehensive car insurance instead of third party insurance as in the present case, your car insurance provider would have paid for the damages after making necessary deduction. Now, do you still believe comprehensive car insurance is expensive? A good car insurance plan should give you maximum coverage at the best possible price. Therefore, do not view this as an expense but a means to protect you from making unnecessary expenses.

3) Vehicle Insurance Only Covers Road Accidents

While your comprehensive car insurance policy will pay for loss of life or injuries as well as damages to your vehicle due to an accident, it covers more than just accidents. It pays for total loss too. Moreover, you can increase your car insurance coverage by opting for add-on covers. For instance, if you buy the New Car for Old Car add-on cover, you will receive the full Insured Declared Value (IDV) amount without considering depreciation as on the day you purchased the cover.

4) No Claim Bonus Is Lost Once I Move To Another Vehicle Insurance Provider

The No Claim Bonus (NCB) is the discount offered by your car insurance provider on policy renewal for making zero claims during the policy tenure. This NCB discount keeps increasing with every claim-free year. The maximum discount you can get through NCB is 50 per cent, which translates into substantial savings on policy renewal. One of the biggest myths surrounding car insurance is that your NCB will be lost if you change your car insurance provider, therefore they end up continuing with the same car insurance provider even if they are not happy with their services and products. The good news is that the NCB discount can be transferred to your new insurance policy with the new car insurance company. So, go ahead and choose another car insurance company if you are not satisfied with your present one.

5) Buying Vehicle Insurance Online Is Complicated

While millennials are comfortable making purchases online, the older generations feel that buying car insurance online is complicated. However, this is just a misconception that needs to be addressed as buying insurance online is easy, and can be done anywhere and time. You just need to enter details about your car and other personal information such as contact details and make the payment to complete the purchase of your online car insurance. If you renew your car insurance online, you might only need to have your policy number to complete the process.

6) If my car is stolen, I will get the full amount reimbursed

A car insurance company pays for claims related to the total loss of your vehicle after considering the IDV of your vehicle. IDV is the maximum amount that your vehicle insurance company will pay in case your car is lost or damaged after taking depreciation into account.

Knowing these facts about car insurance will help you avoid any disappointments later, and make informed choices.

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