10 Car Insurance Myths And Facts You Should Know
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Any car insurance first time buyer would have received a lot of advices for dos and don’ts on what type of insurance to buy, from where and whom. But even then we end up getting confused on what is the myth and what actually is the fact. Advices and inputs are good, but nothing compared to a reality check by yourself. Understanding how car insurance works, how the premium is calculated, what are the coverage I need, etc. are all the questions you need to ask yourself before buying a car insurance. Lack of understanding the vital concepts on car insurance can lead to claim rejections in the future if you have filed a claim which is not covered in the policy. So online third-party websites will help you understand the car insurance policies better and also help you make a better decision while purchasing a car insurance.
Here are some myths and facts about car insurance:
| Myths | Facts |
| Used cars or second-hand cars do not need car insurance | Regardless of new or used cars, buying car insurance is mandatory under Motor Vehicle Act of 1989. Insuring your car with a comprehensive policy with few necessary optional covers will protect the vehicle in the longer run. If it is an old car, then the probability of theft or mechanical errors are higher. Therefore a proper motor insurance is definitely needed. |
| No-claim bonus is non transferrable | No-claim bonus is a discount that the insurer gives for not claiming the policy during that year. No-claim bonus is absolutely transferable if you are changing the insurer. It will be applicable with the new insurer as well. NCB is non-transferable only if you are transferring to another person not the insurer. |
| Car insurance provides protection only against accidents | If you have bought a comprehensive policy, it is necessary to know what it covers as well. No car insurance does not cover only accident either to you or the third-party, it provides protection against a number of situations like theft, robbery, natural calamities, man-made calamities like terrorist attacks, riots, damage in transit, etc. If you have brought only third-party liability cover, then it covers all the damages or injuries caused to the third-party by you or the insured vehicle. |
| Purchasing car insurance is a tedious process | With the help of online platform and various third-party websites, purchasing car insurance is no more a cumbersome process. It is easy, quick, saves a lot of time and money. The documents will also be sent to you immediately without any delay via email. |
| Third-party policy cover is sufficient | Whether it is a used car or a new one, insuring your car with just third-party is not enough. Third-party cover provides no protection to you or the vehicle. It only covers damages caused to the third-party person or property. If your vehicle is in any mishap or has suffered a collision damage or robbed, you will have to bear the entire cost of the loss or repair. |
| NO-claim Bonus is automatically transferred to the new owner if I sell my car | No-claim bonus is a reward given to you and your driving record. It belongs to you and solely you. Under no circumstance is it possible to transfer NCB from one person to another. |
| Car insurance covers all damages caused by you | Every policy has some limitations and exclusions and so does car insurance. There are some exclusions like driving while intoxicated, normal wear and tear, consequential losses, depreciation, etc. which are not covered in the policy. |
| Insurer cannot be changed once bought by them | There are a number of reasons for which you may not be satisfied with your insurer. In such instances, changing the insurer is completely a viable option. You just have to notify your current insurer with a week’s notice and ensuring that you have replaced the old policy with the new one. Only then the cancellation process will be complete. You can also ask the insurer to transfer your NCB to the new insurer. |
| Claiming process is chaotic | If you have availed cashless claim facility or if it is a default facility available with the insurer, then you need not pay for any damages or hospital fee if anything happens. The insurance company will take care of all the payments once you have intimated the insurer and followed all the steps. If you have already paid for the damages and repair, you just have fill in few claim forms attach all the bills and provide relevant details of the incident. On verifying all the bills and a detailed investigation of the incident, the insurer will reimburse your claim amount. But do not settle any amount to the garage or the third-party without notifying the insurer. |
| If my car has crashed, I will get back the initial price of my car | Only if you have brought return to Invoice add-on cover, will you get back the initial price of the car. Else the claim amount will be paid to you after calculating the depreciation, IDV, and other factors. So do not be under any false impression that if you have lost your car or it is in irreparable condition, the insurance company will repay the entire amount. |
Your car and your life is much more valuable to the insurance company than to you. So please understand and read the document carefully before you sign on it. It is important to verify the myths and facts with every long-term purchase you make. If you are unable to understand any clause in the document, please contact the insurer and ask for clarification. This will help you in the future while renewing, claims, and availing discounts.
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