Knowledge Centre

5 Myths About Car Insurance in India

Published on August 8, 2020. EST READ TIME: 5 MIN

It is quite a well-known fact that according to Indian law, while purchasing a new car, purchasing a car insurance policy is mandatory. Car insurance policy would help in the protection of not only the car but also the person driving the car in case of any accidents or damages. But there is a lot of misinformation floating around related to car insurance plans, which leads to misconceptions among vehicle owners. It is important to debunk popular car insurance myths hovering around car insurance plans so that owners can make an informed choice at the time of purchase.

Myth 1: Purchasing a car insurance policy is a tedious process

Fact: The fact is no, it is not a tedious process anymore. Technological advancements have made the entire process easy and quick. You can purchase and renew car insurance policies online conveniently and with minimum documentation. You just need to fill the basic details associated with your car, compare car insurance plans online, and make an informed decision. Your car insurance would be in your mailbox within some time. This process is cheaper and very efficient.

Myth 2: The No Claim Bonus (NCB) gets forfeited on transfer from one policy insurer to another

Fact: NCB (No Claim Bonus) is a reward, which you obtain for not making any claim during your policy period. It is a myth that you might lose your NCB while you are transferring your policy from one insurance provider to another. However, the fact is that you can easily transfer your NCB from one insurance provider to another and obtain the benefits. To retain the NCB, you will have to obtain your new car insurance policy within 90 days after your old policy has expired. After 90 days, your NCB would become invalid and you would not be able to avail the benefits.

Myth 3: You are a safe driver and do not need car insurance

Fact: You might think that you are an experienced and safe driver, so there is no need to purchase car insurance. This is a wrong perception. You might be sure that you are one of the safe drivers but you cannot be sure about the conduct of other drivers and road conditions. In case your car meets with an accident and your car is not insured, then you would have to pay all the expenses incurred in damage of third party car and also your car out of your pocket. Moreover, the Motor Vehicles Act, 1988 makes it compulsory to have a third party car insurance policy while driving cars on the Indian roads.

Myth 4: Your insurance premium would be low if your car is older

Fact: Usually, it is said that the older the car, the lower would be the premium. It is believed that the IDV (Insured Declared Value) of your car is the main factor determining your car insurance premium. So, if your car is older, then the IDV would be also less and hence, you would obtain cheaper insurance. However, this is not true always. In addition to the IDV of your car, there are several other factors as well, which determine the insurance premium of your car. These factors can be your previous driving history, the distance you have travelled, your claim history, the category of coverage you have purchased,  your NCB, etc. In case you have made numerous claims in the previous year, then your premium for the current year would be high.

Myth 5: Claim settlement is a very painful process

Fact: This is one of the most common car insurance myths. You might believe that in case of an incident involving your car, you might have to take a lot of pain to get a claim . However, this is not a fact anymore. Claim settlement procedures are quite easy and can be done online conveniently. You will have to log in to the insurance company's website and fill up the claim form. In case of successful claim registration, you would be asked for submitting your documents. You can obtain assistance anytime during the claim procedure by connecting with the customer care representatives or by referring to the FAQs present on the company website.

Conclusion

So, these are some of the most common and widespread car insurance myths among vehicle owners. You must understand the differences between myths and the realities associated with them to fully appreciate the car insurance cover that you own. Make sure to compare car insurance policies online and buy the ones which suit your requirements by providing maximum coverage with nominal premium.

Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 6,800+ network garages, you can be assured of help in event of any damage to your vehicle".

Few other articles


Awards & Recognition