Myths About Car Insurance Busted
Published On Aug 28, 2021 11:00 AM By InsuranceDekho
Let’s bust different types of misconceptions people have about car insurance.
Table of Contents
- Myth: Buying a car insurance plan is a tedious and long process
- Myth: Old cars are charged with lesser insurance premium
- Myth: I will lose NCB if transfer my policy to another insurer
- Myth: Car insurance is of no use for rural people
- Myth: In case of total damage, the claim amount will equal the cost of a new car
Many times we listen to some facts related to car insurance that are not completely true. It can lead us to make wrong choices when it comes to purchasing a plan. The misconceptions about car insurance are many that make people confused and unable to utilize the policy in the best manner. Let us bust some common myths about car insurance.
Myth: Buying a car insurance plan is a tedious and long process
Fact: In this digital era, when most things are purchased online, the insurance policy is no different from such products. The online services offered by many insurance companies have made the purchase and renewal process of a car insurance plan swift, simple and seamless. You just have to enter basic details about your car, compare policy quotes, and select a policy and pay for it via digital payment options.
Myth: Old cars are charged with lesser insurance premium
Fact: Since we know that Insured Declared Value (IDV) is the major factor that determines the car insurance premium. With time, the IDV is reduced that will take down the premium cost as well. But, it does not happen always this way. The premium is impacted on various other factors as well that comprise policy coverage, car owner’s age, No Claim Bonus (NCB), claim history, etc. For instance, making various claims in a policy year can also increase your premium in the next year.
Myth: I will lose NCB if transfer my policy to another insurer
Fact: No Claim Bonus (NCB) is a reward provided by insurance companies to their policyholders for not making any claim in a policy year. Since the NCB benefit is given for responsible driving and not to the insured car, therefore, it can be transferred to another insurance company. To retain it, you just have to renew your plan on time and avoid raising any claim.
Myth: Car insurance is of no use for rural people
Fact: Firstly, it is compulsory for every car owner to carry a car insurance plan while driving in India as per the Motor vehicles act 1988. Secondly, it does not matter if you live in a less traffic area where chances of accidents are very less, even then, non-accidental events can damage your car such as theft, earthquake, cyclone, flood, fire, riots, etc. These incidents can also damage your car badly, hence, a car insurance plan is necessary everywhere.
Myth: In case of total damage, the claim amount will equal the cost of a new car
Fact: Every car insurance plan has an IDV that refers to the maximum sum insured to be given by an insurer, especially in case of total loss or theft or damage beyond repair case. As the car gets older, the IDV is computed as per the market price prevailing in the market after taking depreciation into consideration. So, if your car suffers total damage, you will get compensation as per the financial condition of your car in which it was before the occurrence of damage.
How To Lower Premium of Your Car Insurance?
Top Factors That Determine The Premium of Your Car Insurance Plan
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.