5 Common Myths About Buying Motor Insurance

During the process of getting auto insurance, it is important to understand the premium structure and the factors that affect the premium. However, differentiating between fact and fiction is a whole other dilemma as the auto insurance sector has its own set of myths and misconceptions. Without a thorough understanding of motor insurance policies, you could wind up choosing a less favorable policy for yourself that could also have serious financial implications. Myths around motor insurance play a significant role in baffling customers.

In this article, we will bust 5 misconceptions associated with motor insurance, and help you find the best plan for your vehicle. So let's take a look.

My Old Car Does Not Need Auto Insurance

The Indian Motor Vehicle Act of 1961 makes it mandatory for every vehicle to be protected by an insurance policy, old or new. However, many people might feel that the low replacement value of an old car does not require the renewal of comprehensive insurance or even a third-party insurance plan. But what we need to remember here is that old cars have a high probability of theft due to the demand for their parts. Hence, motor insurance is very important, not just for new but old cars, as it grants a sense of security to the car owner and policyholder.

Insurance Only Covers Damages When I'm Not Guilty

When you have Comprehensive Motor Insurance, you are covered for all types of accidents including the ones where you are at fault. All you need to provide is your valid driving license at the time of claim. Comprehensive Motor Insurance covers your vehicle for mechanical faults or damages, theft, flood, terrorism, riots, etc. However, if you are in an accident under the influence of alcohol or drugs, your damages will not be covered. Additionally, the use of your vehicle should comply with the policy term and conditions. It means that if you use a personal vehicle for business purposes and meet with an accident, you can not raise a claim for its damages.

If I Transfer My Policy To Another Insurer, I Will Lose NCB

The No Claim Bonus(NCB) is a kind of reward given to the policyholder for having a claim-free year. It is an amount that accumulates year after year if no claims are raised. The NCB is a transferable feature that follows you wherever you go. That means even if you transfer your motor insurance from one insurer to another, your NCB gets transferred to your next insurer. All you have to ensure is that your transfer is filed within 90 days from the expiry date of your old policy.

If I Sell My Car, The New Owner Will Get My NCB

The NCB is an asset that a policyholder earns for not raising any claims in their policy years. In a way, it also reflects on the seasoned driving skills of the policyholder. Therefore, only the policyholder has rights to it. Regardless of whichever insurer you choose, your NCB will remain with you and you will receive it if you choose to sell your car to another owner. It usually happens after the hypothecation process or the transfer of the car's ownership takes place.

The Online Claiming Process Is Confusing

The online claim process is easier than you think. You can simply log on to your insurer’s website and fill out the claims form by providing relevant information and submitting it. Soon after your claim is registered online, you’ll be contacted by a customer care executive within 24 hours. They will take you through each step of the remaining formalities. All of these steps of the process happen hassle-free and without any confusion. If your vehicle sustains any damages, it is taken to a garage directly, and the insurer takes care of the claim from there itself.

So, if you are considering getting motor insurance, do not let the above myths and misconceptions derail you from your intent. Motor insurance is a necessity today as it secures your vehicles and unburdens you financially in the event of a mishap.