Wednesday, October 21

Debunking 5 Common Myths About Car Insurance

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Car insurance in India is a legal mandate, yet India has one of the lowest car insurance penetration. And this low insurance coverage is due to the prevalence of false information or the lack of proper awareness. There’ll be stories of insurance fraud that’ll probably get you thinking that car insurance is a waste of money. 

In such cases, the most fool-proof way to get the right information about car insurance is to look up credible sources online. Or you can talk to experts at a car insurance company and get your queries resolved efficiently and correctly. Better still, get in touch with different insurance providers to understand what they are offering.

Of all the car insurance myths that you may have come across, here are some that have been debunked.

Popular Car Insurance Myths and the Correct Facts

MYTH: Purchasing car insurance is time-consuming.

FACT: It is the age of the internet, and everything, right from your groceries to your clothing, is just a single click away. It is the same when you buy car insurance. The old procedure of visiting the insurance office, waiting in a queue and filling out copious documents has been conveniently done away with. Not only is it quicker to get car insurance online but also helps you go digital and paperless.

  • Research insurance online: Whenever you are looking for insurance coverage for your car, keep in mind that the sum assured should cover the complete damage or theft of your car. When choosing an insurance provider, you can look at all the features, benefits and inclusions that the insurance provider has to offer. Check their policy documents to check the policy inclusions, and more importantly, the exclusions from the policy. That way, you can decide whether the policy is suitable for you or not.
  • Comparing policies: It is advisable to choose cost-effective car insurance. There are many good companies who can offer great insurance covers as per your needs. Always remember to compare two or more offerings on an aggregator website, to come to a decision. By using an online premium calculator, you can compare the premiums from different providers and find one that is best for you – features-wise and price-wise.
  • Choosing add-ons: A standard comprehensive car insurance policy does not always cover all types of damages or all of the car’s components. Some of these need to be covered by specific add-ons that are offered by the insurance provider. By choosing the right add-ons, you can give a complete protection to your car from all kinds of damage. Some popular add-ons are engine protection cover, zero depreciation cover, return-to-invoice cover and passenger cover.
  • Purchasing the policy: While you purchase your car insurance online, you need to provide your correct personal details like your full name, your income proof, your residential address, etc. Apart from these, also fill in your details of your car, such as the registration number, the car’s model, the date of purchase as also the kind of cover you choose. After filling in all the details, be sure to go through the policy documents before making the final purchase. 

MYTH: I am a safe driver, and I do not need car insurance

FACT: No matter how you drive, it is important that you buy car insurance. While being a safe driver is always an advantage, there is always scope for other types of damage to your car. Also, as per the Motor Vehicles Act of 1988, you are legally mandated to buy car insurance before driving the car on the roads. If you have to get new car insurance, then do not delay the purchase.

Car insurance will cover not just accidental damage but also protect your car against damages caused by natural calamities like floods and man-made calamities like riots and terrorist attacks. Of course, it is important that you go through the policy fine print and understand the exact extent of the coverage before buying any policy.

MYTH: I will lose my No Claim Bonus (NCB) when I get a new car.

FACT: The No Claim Bonus (NCB) is a financial reward offered as a discount to the policyholder for not filing a claim during the car insurance policy term. This is possible if you have been a careful driver and kept your car free from damage caused by even minor accidents. The NCB is a reward to you, the driver, for ensuring that you drive safely and avoid claims. Thus, the NCB is linked to you and not your car. You can transfer your NCB from one insurer to another or from an old car to a new car as well.

However, once the existing policy expires, it is essential that you buy new car insurance within 90 days. A renewal notice will let your new insurer know that you are entitled to the NCB from the previous insurer. Crossing the 90-day mark will result in the loss of the NCB benefits.

MYTH: A third-insurance policy is good enough for my vehicle since my car is hardly used.

FACT: The Motor Vehicles Act, 1988, makes it mandatory for every car owner to have third-party insurance for their vehicle. But that will only cover the damages that your car causes to another vehicle, and you will not be reimbursed for the damages caused to your car or the injuries sustained by you.

With a comprehensive car insurance cover, you can be protected against ‘Own Damage’ as well as third-party liability. This will cover the harm caused by accidental incidents like fires, natural calamities as well as theft. Tata AIG provides flexible options for comprehensive insurance policies. Not only can you buy car insurance online on their website but also calculate the premium with their online premium calculator.

As mandated by the Insurance Regulatory and Development Authority of India (IRDAI), a Personal Accident Cover has to be part of every car insurance policy. The Personal Accident Cover will take care of any medical expenses that occur due to damage caused to the owner-driver in an accident.

MYTH: Filing a claim for damages is full of hassles

FACT: When you buy car insurance, make sure that you check the efficiency and reliability of the claim settlement process of the insurer.

To some extent, it is true that an insurance company of low repute could have a bad record of settling claims. Therefore, checking a company’s Claim Settlement Ratio is very important. You can find the Claim Settlement from the IRDAI’s website, and choose an insurer that offers a high Claim Settlement Ratio. That way, you can be sure that your claim will be settled properly without any hassles. 

Conclusion

There could be a lot of misinformation we consume from various sources. However, the fact remains that car insurance will always be necessary for your vehicle. By not having a third-party liability, you will be violating the legal mandate of compulsory third-party car insurance. And if you do not have a comprehensive car insurance cover, then it puts your own car at risk since the finances will have to be taken care of you, in case of accidental damage.

If you do enough research on what can help you choose the best car insurance in India, then you can easily find one for yourself. It is best to be prepared with a financial safety net in the form of an insurance policy so that your hard-earned savings do not take a hit!

 

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