Inaccurate Car Insurance Myths That Often Startle Buyers

When you buy a car, its insurance cover is the immediate next purchase you need to decide upon. With a regulatory requirement, this step cannot and must not be skipped. Apart from compliance with the law, buying a car insurance has its benefits like protecting your car against road-mishaps, theft and other perils like natural disasters and man-made perils. For that, you need to select a policy that suits you the best. However, during this process there are a lot of car insurance myths that you might have heard or may come across. This article aims to debunk four such myths to ensure only the right information is available for you to base your purchase upon. 

Myth 1: Safe drivers do not need insurance

The most commonly heard of myth is safe drivers do not need to buy an insurance cover. While all your friends and family might vouch how safe you drive, it cannot guarantee that no accident will ever involve you. It may not be your fault always but can result in an accidents injuring some third person. For such reason, the Motor Vehicles Act of 1988 makes it mandatory to have a car insurance policy for all registered vehicles in the country. Alongside vehicle registration and PUC certificate, an insurance policy is the bare minimum you need to have to legally drive on Indian roads. For this reason, a third party car insurance has been stipulated as the basic insurance policy that all car owners must possess. 

Myth 2: Old cars do not require insurance anymore

This is a popular myth you might have come across from your elders. The ones who have been driving for more than a couple of decades believe that insuring an old car is like feeding an elephant in your backyard. However, they often forget that apart from the legal requirement, there is a high chance of theft, especially for old cars since how easily it can be sold off in spares in illegal markets. Thus, even if you happen to pick a used car, make sure you avail a comprehensive car insurance policy. 

Myth 3: New cars require higher premiums

Car insurance premiums is based on a variety of factors like the different types of car insurance plans, engine capacity of the car, its IDV, the optional riders that you have opted for, registration year and many more. Being a new or old criteria isn’t the sole determining criteria for pricing the premiums. 

Myth 4: Insurance company pays the entire cost of car as compensation

Believing this myth can cost you in the long run. No insurance company pays the entire cost of the car as compensation. Depreciation is a critical factor that is considered when determining the pay-out for your car. Moreover, the IDV of your car along with the add-ons like zero-depreciation cover are some of the factors that determine how much your policy pays in the different situations. 

These are the most common misconceptions about car insurance plans that have cost policyholders in the past which you should avoid. Keeping them in mind can help you get the best coverage at an affordable price while being fully aware of what you are getting yourself.  Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.