10 Auto Insurance Myths You Should Avoid

While buying auto insurance, it is vital to understand the premium structure and the factors affecting your premium. But sometimes, it becomes difficult to differentiate between the fact and fiction, as like other segments, auto insurance sector also has its share of myths. The lack of proper understanding about motor insurance may affect your choice of policy or hinder the financial interests. Moreover, myths around insurance, whether it is a car, home, health, play a significant role in putting you in a baffling state of mind. Due to its persistent and unrealistic nature, it causes harm and no good. In this article, we’ve busted 10 myths associated with auto insurance, which may help you find the actual plan for your vehicle.

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Myth 1: I am using an old car so I don’t need auto insurance

Reality: It is mandatory by the law of Indian Motor Vehicle Act, 1961, to protect your vehicle through an insurance plan, whether it is old or new. You may feel that the low replacement value of an old car doesn't justify a comprehensive insurance plan, though remember that old cars have the high probability of theft, due to the demand of its parts. Moreover, old cars are easy to steal. 

Myth 2: Motor insurance only covers the accidents where I am not at fault

Reality: Having a motor insurance policy means you are covered for all types of accidents, provided you have a valid driving license. With comprehensive auto insurance, you can get coverage for your vehicle in the event of mechanical faults or damages, theft, flood, terrorism, riots, etc. However, it is a strict no if an accident occurs under the influence of alcohol or drugs. Moreover, your use of the vehicle should comply with what is mentioned in the policy document. For instance, if you are using your personal car for business purpose and meet with an accident, then you can’t make a claim for the damages. 

Myth 3: I can’t transfer my policy to another insurer because if I do, I’ll lose my NCB

Reality: If you are not aware the fact that no claim bonus (NCB) is sort of a reward given to the policyholder for each claim-free year. It is a substantial amount and will be accumulated year after year if the claim is not made. Your NCB follows you wherever you go. That means even if you transfer your auto insurance from one insurer to another, you can transfer the NCB as well, provided it needs to be filed within 90 days from the expiry date of your old policy. 

Myth 4: Third-party cover is enough if my car is old

Reality: A third-party auto insurance policy only covers the damages to a third party and doesn’t pay for the damages to your car. It is hereby advised to take up a plan keeping in mind the condition of your car than its age. 

Myth 5: MY NCB will go automatically to the new owner if I sell out my car

Reality: NCB is your asset, a reflection that kind of proves your driving skills. Only you have right on it. No matter whosoever the insurer you are keen to select, your NCB follows you and you can avail the 100% benefit of it. So, it is completely a fiction that NCB will be transferred once you sell your car. 

Myth 6: Your insurance covers you for all damages caused by you

Reality: Usually, but may not always, especially when you are convicted of drinking and driving. Your insurer turns down your claim straight away. 

Myth 7: I can’t change the insurer once I buy one

Reality: Insurance plans are mostly valid for one or two years except for the multi-year plans. And, it is not a fact that you can’t change your insurer. You can change it at the time of renewal with the full benefit of NCB, you earned from the previous insurer. 

Myth 8: I need to take a separate policy if I have a driver

It is good to add your driver to your policy and it doesn’t require you to have a separate auto insurance policy for the same. The only thing to be ensured is that the driver has a valid license. If not, the insurer wouldn’t accept your claim, in case of an accident. 

Myth 9: In case of an accident, I will have to pay from my pocket then go through the complex claim process

Reality: Whether you pay or not, your claim will be reimbursed. For online insurance, you can visit a network garage and the insurer directly settles the incurred expense, so no intervene is required. Also, if you are unable to visit a network garage due to some reason, you can claim for reimbursement later. 

Myth 10: The claiming process is riddled with discrepancy

The claim process of auto insurance is not at all difficult. You just need to log on to your insurer’s website, fill out the claim form by providing relevant information and submit it. Once your claim is registered online, you’ll be contacted by the customer care within 24 hours and they will assist you with further formalities too. Again, if your vehicle is taken to a garage, the insurer takes care of the claim directly and you don’t have to pay a single penny. 

Conclusion!

This article signifies the need for understanding auto insurance myths and important insurance facts for a car owner. Since it is mandatory by law to have an auto insurance policy, i.e. at least third-party cover, car owners always look for the accurate auto insurance policy. Hereby, it is essential to know how to differentiate the myths and accept the fact. You can have a clear conversation with the insurance advisor about your requirement and he/she can better guide you about which insurance plan to buy for your car.