Almost every car owner understands the significance of having comprehensive car insurance. But sadly, understanding the legal mumbo-jumbo associated with car insurance policies remains a daunting task, for many.
The myths and misconceptions around car insurance policies further add to the confusion. You would need to understand what’s just a myth and what’s the fact in order to make the most of your car insurance policy.
We’re sure you’re wondering:
“How do I get to separate the most common car insurance myths from facts?”
Well, today I’m going to make it easy for you by busting 9 common car insurance myths.
So, let’s get started! Shall we?
Myth 1 –Only Car Dealers Give the Best Car Insurance Deals
Many people are under the impression that when buying a car from a particular dealer, purchasing car insurance from the same dealer helps get a better deal. Not true - car dealers usually pitch those insurers with whom they have tie-ups or those who pay them higher commissions. To ensure you get the best deal, it helps to compare quotes from various sources and compare them with what the dealer offers. Compare car insurance quotes online also helps get good deals. Finally, before zeroing in on the insurer, check the offered add-ons, claim settlement ratios, etc.
Myth 2 - Minimum Coverage is Profitable
Getting only as much coverage as would be required to pay a low minimum premium is a wrong decision. It might save some money in the short term, but it is not helpful in the long run. For instance, opting for a high deductible policy might lower your premiums, but it would also mean that you will have to pay a higher out-of-pocket amount in case of a claim.
Myth 3 - Number of Drivers Does Not Matter
A vehicle driven by multiple drivers increases risks for insurance companies, and they therefore charge higher premiums. On the contrary, car insurance companies consider single-driver driven vehicles safer, better maintained and driven within applicable rules and regulations. It is, therefore, better to ensure that only one person drives the vehicle.
Myth 4–No Claim Bonus (NCB) Lapses in Case of Delay in Policy Renewal/NCB is Lost If the Car Insurance Policy is transferred from One Insurer to Another
You have been a careful driver and steered clear of accidents, and therefore accumulated a sizable NCB for over three years. However, your car insurance policy lapses, and for some reason, you are unable to renew the policy on time. Nevertheless, there is no reason to worry about losing your accumulated NCB - a 90-day period from the policy expiry date is permitted, within which you can renew your car insurance policy and carry forward the entire NCB.
Also, your No Claim Bonus follows where you go. Therefore, even if you switch insurers, you can transfer the entire accumulated bonus amount without any losses.
Myth 5 - Installing an Anti-Theft Device has No Bearing on the Premium, Nor Does Being a Teetotaler
Insurance companies offer discounts on premiums if car owners install an anti-theft device in their vehicle. Installing an ARAI-approved anti-theft device allows an even higher discount on premiums. Since this practice lowers the number of claims made, it benefits the insurance company as well.
Further, if you are a teetotaler, you can ask for the abstainer discount.
Myth 6 – All Add-ons the Dealer Proposes are Essential
The add-ons you wish to purchase with your car insurance policy will depend on your specific requirements. Often, dealers’ hard sell add-ons you may not even need just to earn better commissions. However, you should only get those add-ons that are most essential for you. For instance, the zero depreciation cover is beneficial for new drivers.
Myth 7 - Buying Car Insurance from Dealers Comes with a Range of Extra Benefits/Free Services
Free servicing for a certain number of years, free car wash, Teflon coating, etc. are value added services that dealers must provide without the condition of purchasing the car insurance policy from them. Further, important offerings like cashless claim settlements, genuine part usage, quality assurance, quick survey, etc. are offered by the insurance company and are not tied to buying insurance from the car dealer.
Myth 8 – One’s Occupation has nothing to do with the Car Insurance Premium
In fact, quite the opposite is true. Occupation plays a key role when a car insurance policy is purchased - it determines the quantum of car insurance discount you will qualify for. For instance, doctors, teachers, engineers and the likes are considered to be more careful drivers.
Myth 9 - Insurers cannot be Switched
There is no hard and fast rule that you need to stick to the same insurance company. If another insurer is offering a better deal, a switch is only wise. However, this has to be done well before expiry of the current policy. If you delay premium payments, policy renewals, or switching insurers, you fall into the high-risk customer category and will therefore be charged higher premiums.
The Bottom Line
Remember, it may look too daunting to read through the fine prints of your car insurance policy, but it will help you understand facts from myths, which is vital if you want to make the most of your car insurance policy.
Have something to add to this list? Leave us a comment below and let us know. We’ll love to hear from you.
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