5 Misconceptions About Car Insurance That Might Cost You A Fortune

Misconceptions are unrealistic and hence, cause more harm than good. Vehicle insurance myths and misconceptions are no different. In addition to the fact that they put the policy seekers in a predicament, they also leave them unaware of their rights. Therefore, we have investigated some of the common car insurance myths to help you find the right policy for your car.

Myth 1: If You Transfer Your Policy From One Insurer To Another You Will Lose Your No Claim Bonus.

Fact: If you aren’t aware, a No Claim Bonus is a kind of reward that the insurance company gives you for handling your car well and thereby not making any claim in a year. Only you have right on the NCB and regardless of who the insurer is, your NCB follows you, allowing you to avail its 100 percent benefit.

In this way, the NCB is, without a doubt, transferable from one insurance company to another. However, it should be filed within 90 days of the expiry of your old car insurance policy. So, ensure that you renew it in time.

Myth 2: Third-Party Liability Insurance Is Enough For Your Car

Fact: Having a third-party liability cover is mandatory for each vehicle in India. So as to fulfill this legal liability, individuals purchase third-party liability cover, thinking that it saves cost. Without a doubt, it is more affordable as the premiums are low.

A comprehensive car insurance policy costs more than a third-party liability policy; however, when it comes to benefits, features, and quality, the former offers the highest level of protection that you can give to your beloved car. As the name suggests, comprehensive car insurance provides coverage for the damage or loss to your car, theft, third-party legal liability, along with the personal accident coverage.

Furthermore, the coverage can be boosted by selecting add-ons. And the good news is that reputable insurers like TATA AIG General Insurance offer 13 add-ons including zero dep car insurance cover, engine secure cover, no claim bonus protection cover, roadside assistance cover, etc. A comprehensive car insurance policy, thus, offers full-fledged coverage and leaves you stress-free.

Myth 3: In Case Of Total Damage To The Car, You Will Get An Amount Equivalent To The Amount Of A New Car

Fact: Every vehicle insurance policy has an Insured Declared Value (IDV) referenced in it. IDV is the highest amount payable at the time of claim in case of total loss of your vehicle, or on the off chance that it gets damaged past repairs or is stolen. 

So, as your car gets older, the insurance company calculates its IDV as per the current market price after taking depreciation into account. Consequently, in case of total damage of the car, the insurer compensates as per the same financial position your vehicle was in before it was damaged or stolen.

However, if you have opted for zero dep car insurance cover, you will be reimbursed or compensated with the amount of claim that got deducted due to depreciation.

Myth 4: The Process Of Claiming Vehicle Insurance Is Complicated

Fact: The procedure is actually straightforward and simple. You need to simply log on to your insurer’s website and fill up a claim form. When that is done, you can keep tabs on its progress online.

When the claim is registered, your insurance company will contact you within 24 hours for document submission, which is the next stage. The best part is, in any case, you will receive assistance from your insurance company at every stage.

Myth 5: You Cannot Change Your Insurance Company

Fact: Opting and sticking to a specific insurance company is a matter of personal choice. It’s a misconception that you need to stay with the same insurer for years once you buy the policy.

In fact, by doing so, you may miss out on the benefits that you can get with a different car insurance policy offered in a similar price range.

You can change your insurance company at the time of renewal or opt to withdraw any time by merely submitting a letter and still avail the full benefits of NCB from the previous insurer.

These are some basic misconceptions about car insurance. At the point when you decide to buy car insurance, keep these points in your mind and get a coverage that is right for you.