Insurance for your car is mandatory as per Indian Motor Vehicle Act of 1961, in order to ensure a financial cover against loss due to theft or traffic accidents.
Choosing the right insurance is crucial for every car owner since it is a shame to waste one’s hard-earned money on insurance plans that don’t provide the right cover or over-charge for their services. Many myths about car insurance cloud the judgment of new buyers when it comes to buying insurance.
Every buyer must know facts from myths to ensure they do not make a mistake while buying insurance for their vehicle. Here are some of the most common myths that plague people while buying car insurance.
- The insurance offered by the dealership is the best
- Using a web aggregator can cost more
- The colour of your car affects the price of insurance
- Letting the insurance policy renew annually is a good idea
- Old cars don’t need insurance
- Once you buy insurance, it covers your vehicle against all damages
- Monthly installments are cheaper than other modes
- Your car insurance rate only depends on your car and what the insurance covers
- Cashless tie-ups mean you don’t have to pay anything other than your premium
The insurance offered by the dealership is the best
The automobile dealership you buy your vehicle from will always show you some flowery presentations of insurance schemes you can buy for your vehicle.
This is the easiest insurance one can buy, since it is available with no hassle. However, these insurance schemes are not necessarily well-suited to your needs.
The dealership ties up with insurance providers who offer them a commission. This is why they persuade buyers to get insurance through their channels.
Buyers must be vigilant and do their research in order to find the right insurance provider and a scheme that suits them the best in order to get the true value for their money.
Using a web aggregator can cost more
Taking the help of an insurance web aggregator increases your options which actually helps you save money instead of spending more.
Insurance plans are compared properly using the special algorithms on such platforms car insurance which allow you to compare the covers and premiums offered by various providers.
The comparisons of premium, interest to be paid, the IDV (Insured Declared Value) provided by PolicyBazaar car insurance page can help the users find the right plan without overpaying for the offered services.
The colour of your car affects the price of insurance
It is often believed that the colour of your car can increase the price you pay for it: this is- in no way- related to your insurance.
Some colour-variants of specific cars cost more than the alternatives, but that is only the cost which is charged by the company dealership, depending on their expenses.
This does not affect the price of insurance or the premium you pay, in any way. Hence, the colour of your car cannot affect the price you pay for its insurance.
Letting the insurance policy renew annually is a good idea
Allowing an insurance policy to renew automatically every year is a lazy move on the part of the buyer.
Every year, new policies are introduced which may be much better and offer the same cover at a much lower premium or offer a more extensive cover at the same premium.
You can smoothly change your insurance scheme once the validity of your current insurance plan expires.
Knowledge of this is important, even if one is not going to switch to another insurance provider. This information can also be used to negotiate with the insurance provider for a better cover.
Old cars don’t need insurance
As per law, it is compulsory for all cars to be insured, but the owners sometimes may feel like the comprehensive insurance is a waste because the replacement value of an old car is significantly lower.
However, owners must also keep in mind that the probability of theft of old cars is significantly higher due to the need for old parts and lower security features on older models.
Once you buy insurance, it covers your vehicle against all damages
Insurance for your car does not cover the damage sustained by the engine in case of an accident.
To insure your engine, you need a rider. Riders can also be bought to cover other parts of your car, and in the long run, can prove to be very useful.
Riders and add-on covers, such as zero depreciation, cover for consumables, loss of personal belongings and many others, are a sign of comprehensive insurance and will help in availing a better pay-out at the time of claim.
Not all damages are covered under your insurance plan.
Normal wear and tear of the vehicle is not something you can make a claim against.
Monthly installments are cheaper than other modes
Monthly installments are not the cheapest way to pay your car insurance premium.
Monthly installments break down the premium into installments smaller than other modes of premium payment. But, the interest rate on such installments would be much higher than quarterly or half-yearly installments.
A web aggregator can help you compare the interest you will have to pay in various installment modes and will help you save money in the longer run.
Your car insurance rate only depends on your car and what the insurance covers
The premium you have to pay is not only dependent upon the car you own.
Not only do factors like the model and age of your car affect the cost, but also your personal credit score plays a role in the insurance policy that is offered to you.
Your credit score depends on your credit history and helps the provider get an idea of your financial stability and management.
Cashless tie-ups mean you don’t have to pay anything other than your premium
Insurance providers often advertise their cash-less tie-ups as the selling points for their policies; the whole process of filing a claim has been radically transformed due to this.
But, contrary to the popular opinion, this does not mean that a car-owner would not have to pay for anything at all.
Payments cannot be escaped since there is a minimum amount, which is a government charge, that has to be paid in case of any claim that is made.
Fancy-sounding insurance plans confuse buyers and take them away from the actual purpose of insurance. Every buyer should understand the terms of their insurance properly, and what all is exactly offered by their insurer before buying insurance. Taking the help of web aggregators and staying up-to-date can help one save a lot of money on their car insurance.