Most Common Car Insurance Myths Busted

Buying a car and car insurance policy go hand in hand. As per the new rule of the Government of India, nowadays it is mandatory to buy a car insurance policy. For a new entrant, venturing into insurances can be daunting and there is the possibility of easily being swayed by myths that might not be true at all! Discerning the difference between a myth and a fact is important and so in this article we are going to tell you about the top 5 myths in car insurance that you need to know. 

Top 5 Car Insurance Myths and Facts

The following is a list of myths corroborated with facts that will bust your wrong assumptions and help you to make a clear choice while investing in car insurance. 

Myth 1: Premium Is Affected By Your Car’s Colour 

Fact: This myth is in no way true or significant. While premiums are decided on the configuration, engine capacity and the body, whether your car is red or white has no bearing upon it at all. Therefore, do not shy away from buying a car with your favourite colour in fear of paying a greater premium. 

Myth 2: Lower Coverage Saves Your Money 

Fact: Contrary to this, you end up paying extra money because of restricted services that come with a lower coverage plan. Accidents can occur at any time and if you have lower coverage, you will have to shell out the damage expenses on your own. Therefore, it is wise to settle for a plan that comes with higher coverage and a higher amount of premium for optimum benefits. 

Myth 3: Your Car Insurance Will Pay For Everything 

Fact: Contrary to this popular notion, your car insurance pays only a certain portion of damages sustained by your car. It comes with exclusion and sometimes you have to pay the initial amount of money from your own pocket, while the remaining money is covered by your insurance provider. This is known as a deductible and different insurance companies have different amounts for the same.

Myth 4: You Lose Your No Claim Bonus (NCB) If You Switch Your Insurer 

Fact: A No Claim Bonus (NCB) refers to the discount that you receive on your premiums for not making any claims on your car insurance policy. Many people think that they will lose this feature if they switch from one insurance provider to another. However, this is not true. Your NCB remains with you even if you switch your car insurance company and is actually transferrable.

Myth 5: Your Premiums Will Increase In Case Of An Accident

Fact: Premium amounts are not affected by accidents. People are confused over this because the moment you make a claim on your car insurance policy, you lose your No Claim Bonus (NCB). It is for this reason that the discount you had enjoyed for not making any claim on your car insurance is no longer available, but the premium amount remains the same. It does not increase in any way. 

Take Away 

These are the top 5 myths that people believe to be true for car insurance. If you keep these facts in mind, it will be easier for you to invest or buy an insurance policy. Securing your car against any kind of unforeseen damage or accident is primary and so you should be attentive about the clauses and workings of car insurance before rushing to buy one. 

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.