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5 Major Myths about Car Insurance

By Finserv MARKETS - Feb 1,2019
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5 Major Myths About Car Insurance

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It is a well-known fact that as per the Indian law, buying a car insurance policy is mandatory when purchasing a new car. It is mandatory to have an insurance policy for a vehicle owner since he is legally bound to pay for the damages arising out of a road accident (accidental death, bodily damage, or damage to property). However, not many understand the importance of having / purchasing car insurance and there are many myths hovering around the same.

It is time to debunk car insurance myths that are often misunderstood by customers across the country. Let’s have a look at these myths:

Myth 1: Buying a car insurance policy is tedious

Fact: No, it’s not. Today, Technology has made buying an insurance policy a quick, easy, convenient and hassle-free task. What’s more? The entire process is online and requires minimal documentation! With Finserv MARKETS you can renew your car insurance online within minutes. You can compare insurance plans online and make an informed buying decision. All you need to do is provide basic details about the vehicle and you will be able to get instant quotes from various insurers. The process is super-efficient as well as effective.

Myth 2: The older the car, the lower the premium

Fact: One needs to understand that the ‘Insured Declared Value’ or IDV is a major factor associated with the premium amount of the car. The car insurance premium definitely depends on the model and age of your car but there are other factors such as your age, claim history, driving record, and no claim bonus that is also considered when deciding your premium. If you have made a high number of claims in the past, there is a good chance that your premium will be higher.

Myth 3: You will lose the No Claim Bonus (NCB) in case of a policy transfer

Fact: NCB or No Claim Bonus is your reward for not making any claim in a given policy year. In case of a sale, it is possible for you to transfer the policy to another buyer and still receive the NCB benefits. However, to retain the bonus, you will have to get a new policy within a period of 90 days after the expiry of the older one. Beyond 90 days, the NCB will not be valid.

Myth 4: You are an excellent driver and do not need car insurance

Fact: No! You absolutely need a car. You absolutely need a car insurance policy to ensure your safety and security. You might be an amazing driver, but the same can’t be said about every other driver on the road. As per the Motor Vehicles Act 1988, it is mandatory to have a valid car insurance policy for a car in India. It will cover the losses in case of accidental and non-accidental damages to the car. You can compare various insurance quotes and buy a policy online.

Myth 5: In case of total damage, you can get a claim amount equal to the cost of a new car

Fact: An insurance policy has an ‘Insured Declared Value’, which is the maximum sum payable by an insurer for the vehicle at the time of a claim. This is the maximum amount you can claim in case of a total loss of the vehicle. It is calculated by taking the current market price and depreciation into consideration. Hence, in case of total damage, you will receive a claim that will compensate the financial position your car was in before the damage occurred

Now that the most common insurance myths are busted, it is best to compare the quotes, buy car insurance online, and keep yourself and your vehicle secure at all times.

To know more on car insurance in depth, you can check out these blogs:

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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522