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Top Myths Prevalent About Car Insurance

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Published on October 4, 2019. EST READ TIME: 3 MIN

Why is car insurance important?

Not only is car insurance a legal necessity as per the Motor Vehicle Act 1988 and under Motor Vehicles Amendment Act 2019, but it also benefits the insured in a number of ways including the following: 

• It will pay for the damages that you incur or cause in the case of an accident

• It takes care of any legal liabilities due to accidents

• It offers personal accident cover should the worst ever happen

• It covers medical expenses due to accidents

What are the myths about car insurance?

It is a natural tendency for us to believe most of the things that we hear from friends, family or colleagues. While there is no harm in listening, taking additional effort to verify a few of these things can be very beneficial for you. Here are the most commonly believed myths about a car insurance policy.

• Car insurance is only for big cities

  A lot of vehicle owners feel that car insurance policies are only for cities. Since the traffic conditions in normal cities or towns are better off, they believe buying insurance is a waste of money. This is not true. The Motor Vehicles Act of 1988 mandates that all vehicles must be insured and this hold true irrespective of which location in India a person belongs to.

  While the Act only mandates a third-party liability policy, buying a comprehensive insurance plan is in your best interest. In the event of an unforeseen incident, the amount that you will have to shell out of your pockets would far exceed the premium costs.

• Buying car insurance consumes a lot of time

  Gone are the times when one had to interact with an insurance agent, discuss insurance plans, get quotes, write a cheque or pay cash to buy a car insurance policy. Today, you can visit the website of any insurance company that you wish to buy the policy from. Within a few minutes, you will be able to fill the application forms online, make the payment and receive the policy in your inbox.

• An older car means lower premiums

  As your car gets older, you do not necessarily need to pay lower premiums. Insurance companies consider quite a few factors to decide the policy premium. For starters, the IDV or the insured declared value of the car does play a major role and it reduces with time, thus bringing down the premiums. However, if you make several claims there is a very good chance that your premiums will increase instead of subsiding.

• The insurance covers all types of damages to the car

This statement is not entirely true. While a car insurance policy does cover a lot of ground, it leaves out a few scenarios. For instance, if the driver of an insured car meets with an accident while driving under the influence of intoxicants or alcohol, the policy will not cover the damages incurred.

Conclusion

Now that some of the common myths about car insurance policies have been debunked, you are in a better position to find the best car insurance that suits your needs.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

Mr.S. Gopalakrishnan recommends "HDFC ERGO for your vehicle insurance needs, it has always put customer’s interest at the forefront, with round the clock assistance to deal with emergency breakdown issues and hassle free claims process. You can be assured of complete and reliable guidance through the whole process."