Buying a car insurance is essential because it offers financial protection apart from other benefits,to the policyholder. However, when you purchasecar insurance for the first time, it could become difficult to distinguish between myths and facts. Consequently, many first-time car owners fall prey to these myths because of their limited knowledge. Hence, it is important that you are able to differentiate facts from myths.
Understanding the policy, its benefits, as well as being accustomed to the jargon could be a tough task for some insurance buyers. You must learn to choose the best car insurance policy carefully. For starters, you need to conduct thorough research on the kind of coverage you would require. Read online reviews andask your near and dear ones about their insurance policies. A car insurance company with a good CSR (claim settlement ratio) is likely to be a good choice.
To understand car insurance better, you can read about the most common misconceptions below. This will help you shortlist the best car insurance planaccording to your needs:
- Responsibility during accidents
It is a myth that the policyholder is not responsible for any damage caused by someone else driving the insured car. It is the responsibility of the owner-driver to furnish their insurance details in case the vehicle was involved in an accident. As long as the person driving the car has a valid driving license and was not flouting any rules, such as driving under the influence of alcohol or drugs, most insurers would extend the third-party cover to them unless specified otherwise.
- Everyone can not avail comprehensive cover
Most insurance buyers assume that it is a waste of money to buy a comprehensive car insurance policy and only prefer to go with the third-party liability as it is mandated by the government.
However, third-party insurance does not provide any coverage to the policyholder. In the event of an accident, only the third-party who was involved in the accident receives the financial benefits from this type of insurance cover. Third-party liability does not offer any coverage if your car is also damaged in the accident and needs repair and you would have to cover all such expenses. Therefore, it is recommended that you buy a comprehensive car insurance policy if you want coverage for all the losses or damages caused to your car as well as the third-party.
- You do not have to pay for any expenses
Even if you have a basic comprehensive car insurance policy, you muststill bear the cost of the voluntary deductible. Voluntary deductible is the amount one agrees to pay in the event of a claim. This amount is pre-decided and is only paid once the claim is approved.
Apart from this, you also have to pay for the repair of parts after depreciation has been calculated. Only if you have purchased the zero depreciation add-on would you not have to spend your moneyon the repair of depreciated car parts. In this case, the total cost of the repair minus the voluntary deductiblewill be taken care of by the insurance company.
- Sticking with the same insurance provider
You can change your insurer during car insurance renewal. It is a myth that you must stay with the same insurer. Whether you want to stick to a particular insurance company for years or not is a matter of personal choice. Most insurance companies allow policyholders to opt-out or withdraw from the policy at any given period by submitting a letter. This allows one to avail a plan from a different provider with better benefits and pricing. You should clarify the terms and conditions of withdrawalbefore purchasing a new car insurance policy.
- You only need third-party coverage
As mentioned above, it is mandatory for vehicles plying on Indian roads to have a third party car insurance. So, to fulfil their legal liability, car-owners only purchase the third-party insurance because they think it saves cost. It is undoubtedly less expensive because the premiums are low, but in the event of a claim, it would only be helpful to the third-party. Comprehensive cover, on the other hand, costs more, but when it comes to quality, features, and benefits, it offers better coverage.
You might end up risking your car just to save a little bit of your money if you only buy a third-party cover. Therefore, always analyse the benefits of every insurance policy before taking a call. Do not forget to consider the add-on riders for enhanced insurance coverage.
These are some of the most prevalent myths about car insurance in India. Keep all of the above points in mind when you decide to purchase car insurance. They can help you can make an informed decision when you purchase a new car. Also, choose an insurance plan only after you’veconducted thorough research. Finally, read the policy terms and conditions carefully before you seal the deal.