Motor Insurance Myths
According to the English Dictionary, a myth is a popular but incorrect belief about something. Surprising as it may sound, we all believe and share myths regularly without realizing that they aren’t true. This is especially true for financial products and services. Today, we are going to talk about some common motor insurance myths to help you find the perfect plan for your vehicle.
Myth 1. Motor Insurance Is Only For New Cars
Untrue. Traditionally, before third-party cover motor insurance was made mandatory, most people used to believe that they needed a motor insurance policy only for new cars. Also, since old cars don’t have a high resale value, paying a high premium for a comprehensive plan seemed senseless. However, today, the law mandates you to have a motor insurance policy. Hence, a new car or not, you need insurance. Also, older cars are usually easier to steal since they don’t have the latest security systems.
Myth 2. If I Cause An Accident, Then Motor Insurance Won’t Work For Me
This myth probably stems from incomplete information about how motor insurance works. The fact is that these insurance policies provide cover against all kinds of accidents. In fact, if you buy a comprehensive plan, then thefts, natural calamities, and man-made disasters are covered too. All you need to do is adhere to the terms of the policy and get your claim honoured.
Myth 3. Selling The Car Means Transferring The No Claim Bonus To The New Owner
The No Claim Bonus (NCB) is a reward for your safe driving skills and proving to be a good caretaker of your car. Hence, the NCB cannot be transferred with the sale of the car. In fact, if you buy a new car, you can continue your existing NCB.
Myth 4. All Damages Are Covered By Motor Insurance
There are many occasions when an insurance claim gets rejected, and the policyholder wonders what went wrong. This happens because car owners assume that all damages are covered by motor insurance. However, there are exclusions that they must keep in mind, as described below:
- Damage or loss due to wear and tear of the vehicle
- Any damages due to an accident or mishap while driving under the influence of alcohol
- Any injury or damage to property caused intentionally
- Damages to the vehicle due to racing, etc.
Myth 5. Claims Processes Are Complex
As long as you follow the policy conditions and submit all the documents requested by the insurer, the claims process is not at all complex. In fact, major insurers like Tata AIG try their best to make the claims process seamless and offer assistance to ensure that valid claims are honoured at the earliest. It helps them increase their claim settlement ratio. Hence, claims can be complex only when the documents are incomplete or if the policy conditions are not met.
Myth 6. If Someone Else Drives My Car, Then His/Her Auto Insurance Covers The Damages
Since the vehicle is insured, if there is an accident caused by it, then the insurance policy of the vehicle covers the damages. Hence, even if someone else drives your car and gets into an accident, your insurance will have to bear the costs.
Myth 7. if i insure my private car, then the cover can extend to the commercial use of my car too
One of the most important aspects of getting a claim honoured is to follow all the policy conditions. Insurers offer different policies for private and commercial use. Hence, if you have insured your private car and use it commercially, then the insurer can deny your claim. Hence, it is important to buy the right kind of insurance based on your needs.
Myth 8. Used Cars Don’t Need Insurance
All cars need insurance – new and old. According to the Motor Vehicles Act, 1989, if you are driving a car on a public road or parking it in a public place, it is mandatory to purchase a third-party liability cover. Hence, regardless of the age of the car, you need to buy an insurance policy that offers at least a third-party liability cover.
Summing Up
Such myths usually lead to unpleasant experiences that cause people to look at insurance in a sceptical manner. Before believing such myths, ensure that you go through the policy wordings and understand all aspects thoroughly. If you have any confusion, then talk to the insurer and seek clarification. Asking the right questions is the best way to keep such myths away and making informed decisions. Remember, motor insurance is a crucial umbrella that helps you manage the financial costs associated with any injury or damage to you/your vehicle or a third-party individual/vehicle. Hence, research well and assess the way you use the vehicle before you buy motor insurance online. Good Luck!