5 Myths About Car Insurance in India

Posted on: Aug 14, 2020 | | Written by:

5 Myths About Car Insurance in India

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

According to the Motor Vehicle Act 1961, when purchasing a new car, purchasing a car insurance policy is mandatory. A 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. While car insurance is mandatory in our country, there are still a number of car insurance myths that float around us.

It may come as a surprise to you that there are over 7 crore four-wheelers in India. What is also surprising is despite such a big number, people are often unaware of the importance and benefits of car insurance. This unawareness and misinformation lead to various car insurance misconceptions.

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. Read on as we discuss some of the most common car insurance myths and facts:

Myth 1: From purchasing a policy to making a claim, car insurance is a tedious process

Fact: When discussing car insurance myths and facts, the insurance processes are at the top of the list. Thanks to technological advancements, neither buying car insurance nor making a car insurance claim is tedious. Rather, both procedures are easy and quick.

You can purchase and renew car insurance policies online conveniently and with minimum documentation. You just need to fill in the basic details associated with your car, compare car insurance plans online, and make an informed decision. Your car insurance will be in your mailbox within some time.

You might think that in case of an incident involving your car, making a claim can be a lot of hassle. However, it is just one of the many car insurance misconceptions. Claim settlement procedures are quite easy and can be done online conveniently. With HDFC ERGO, you also have the option of registering a claim online. At cashless garages, you can get your car repaired without going through any trouble.

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 that you obtain for not making any claim during your policy period. It is just one of the common car insurance myths 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 of the benefits.

Remember one of the most important car insurance myths and facts: The NCB is a reward for you, not your car. If you change your insurer or even if you change your car, you can still enjoy the NCB benefits when you buy a new policy or a new car.

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

Fact: Another one of the car insurance misconceptions. 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 sadly, you cannot be sure about the conduct of other drivers and road conditions.

Unfortunately, if your uninsured or underinsured car meets with an accident, then you would have to pay a major chunk or maybe 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 Indian roads. Not having a minimum of third-party liability insurance can put you in legal trouble as well.

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: Car Insurance is expensive, and you cannot do anything about it

Fact: Thankfully, this is also one of the car insurance misconceptions. When buying car insurance, you have the option of choosing between two main types of insurance coverage.

1. Third-Party Insurance

Mandated by the Motor Vehicle Act, it offers coverage only to the third party

2. Comprehensive Insurance

Offers coverage to the third party as well as for your own vehicle damages. Opt for add-ons for enhanced coverage

You can choose any of the above options. However, it is highly recommended that you go for comprehensive insurance , especially if you drive often. If you want to buy a comprehensive policy but are apprehensive about the money it will cost you, here are some ways to cut back on the premium:

• Buy a policy that best suits your requirements and your budget

• Follow traffic rules and drive safely. Try to avoid accidents as much as possible

• Avoid making small claims and make the most of the NCB. You can get up to 50% discount on the upcoming premium

• If you are a cautious driver, you may want to increase your deductible and decrease the premium

• Renew your policy on time to avoid any break in coverage.

Conclusion

So, these are some of the most common and widespread car insurance myths among vehicle owners. You must understand the differences between car insurance myths and facts associated with them to fully appreciate the car insurance cover that you own. After all, the responsibility of understanding the policy and its finer details lies with the policyholder. At HDFC ERGO, we urge all our customers to go through their policy documents carefully in order to know what they are signing up for. In case of any queries or concerns, you can get in touch with us today!

Also, when buying car insurance, make sure to COMPARE CAR INSURANCE POLICIES ONLINE and buy the ones that suit your requirements by providing maximum coverage with a nominal premium.

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

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