Car insurance is a legal mandate as per the Motor Vehicles Act. This act makes it compulsory to purchase an insurance policy for all car owners. But selecting one can often be confusing among the various alternatives to choose from. Thus, you need to familiarise yourself with the policy terms and coverage, know the terms and conditions along with what determines the premium of the policy before you finally decide upon one.
When deciding which policy is right for you, there are often misconceptions that become myths over a prolonged time. It is essential to stay wary of these myths since they do not help understand your popolicy’sccurate picture. This article debunks a few myths that make it more transparent in buying a car insurance plan.
Myth #1: The color of your car decides the premium cost
There is a popular myth that the color of your car determines the premium cost. However, the reality is far from it. There is, in fact, no connection between the premium charged and the color of your car. The insurance companies consider factors like the enengine’subic capacity, model and make of the vehicle, year and place of registration, and more to base the premium charged for it.
Myth #2: Opting for the minimum mandated insurance helps to save money
Car insurance is available in two types – a third-party plan or a comprehensive cover. While third-party car insurance is the legal minimum requirement, it offers limited coverage. With such third-party cover, only third-party legal liabilities are insured, whereas a comprehensive policy extends its scope to include damages to your car too. Hence, the reality behind the myth that is opting for the basic minimum coverage helps you save money might be partially true; it does not offer any real benefit for times when the damages are sustained by your car.
Myth #3: No-claim bonus is lost if you delay the renewal or change your insurance company
No-claim bonus, or as popularly referred to as NCB, is the renewal benefit offered by the insurance company for not raising claims during the previous policy year. However, the reality behind the myth that you lose your no-claim benefits in the event of a change of insurer or delay in renewal is not valid. For a change of insurer, this no-claim bonus can be transferred, whereas, for delayed regeneration, there is a grace duration of 30 days. If renewed between such periods after the end of the policy tenure, the renewal benefits are available. Visit the official website of IRDAI for further details.
Myth #4: Car insurance pays for all the costs
The amount that your insurer compensates is based on the coverage you opt for it. Like the limitations in range for third-party plans, comprehensive plans have some restrictions in their coverage. Therefore, even a complete policy does not pay for all the repair costs. To avail maximum range in your policy, choosing add-ons might help to enhance the perils covered under it. * Standard T&C Apply
These are some misconceptions that you need not fall prey to. While selecting an insurance plan, make sure to use a car insurance calculator that can help to decide which add-ons and policy cover fits your budget. However, note that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.