Common car insurance myths

The world of insurance remains shrouded in mystery in India. Before purchasing a policy, we ask our loved ones for advice and accept their recommendations. Unfortunately, miscommunication has led to people believing common myths and misconceptions about car insurance plans. Let’s explore the need for a policy and bust these myths to help you understand the truth and make informed decisions.

India made car insurance mandatory by the Motor Vehicles Act of 1988. The Act stipulates that all vehicle owners should purchase third-party liability plans. These policies protect policyholders after an accident that damages a third party and their property. While almost everybody fulfils the legal insurance requirement, few vehicle owners go above and beyond to purchase a comprehensive plan. Let’s explore why some Indians still avoid purchasing a comprehensive car insurance policy.

It was time-consuming to buy car insurance in the 80s and 90s. However, with the advent of the digital age, purchasing a policy has become incredibly quick and easy. You no longer require an insurance evaluator to visit your residence and inspect the vehicle. Instead, you can record and upload a video of your car or bike and apply for insurance within minutes. You can complete the entire process from the comfort of your home. However, those looking for insurance policies should not prioritise speed over everything else. Remember to spend a few minutes understanding the available plans and evaluating your options before purchasing car insurance online. Ensure you identify the ideal policy based on your vehicle usage needs.

Your NCB is a golden ticket to lower insurance premiums. Your insurance company offers a discount on your premium for every year that you do not file a single claim. However, many people believe that switching from one insurance company to another means losing their NCB and the discount that comes with it. In reality, you can transfer your NCB from one insurance company and policy to another. Before you decide to change your insurance company, ensure you enquire about the process to transfer your NCB. You will likely have to ask your existing insurance company for an NCB certificate. Once you show this to the new insurance company, they will complete the process.

A car insurance policy is like an airbag. It doesn’t suit any purpose when things are going well. However, after an accident - it could save your life. People often believe they drive well and safely, so they do not need insurance. However, another driver could lose control of their vehicle and cause an accident. In such situations, your insurance plan offers financial safety. It helps take care of vehicle repair costs. Additionally, personal accident coverage helps with medical bills.

You might have heard that your vehicle’s value depreciates once you drive it out of the showroom. Your insurance company accounts for this depreciation. Every policy will have something called the Insured Declared Value (IDV). It refers to the maximum amount the insurance company will pay after total damage to your vehicle. The IDV changes every few years to account for the depreciated value of your car or bike. Assume you purchased a vehicle for Rs. 10 lakhs in 2015. By 2022, the value might depreciate to Rs. 4 lakhs or less. If your car is stolen or damaged beyond repair in 2022, the insurance company will pay only Rs. 4 lakhs, or the IDV amount. At Zuno, we understand that depreciation impacts your finances and ability to replace your vehicle. We offer a Return to Invoice add-on that will provide you with the invoice value of your vehicle after total damage, safeguarding your finances.

After an accident, you should prioritise looking after yourself and your loved ones. Many insurance companies offer a seamless cashless claim process, enabling you to get your vehicle repaired quickly without large upfront payments or lengthy reimbursement processes. When purchasing a policy, you should check the list of network garages attached to the insurance company. After an accident, you must inform the insurance company about the incident, file the necessary paperwork and take your vehicle to the nearest cashless garage for repairs. The insurance company will settle the claim directly with the garage. Even the reimbursement process has become quicker. Companies have embraced digital technology, enabling you to upload pictures of the damage and file the claim request almost instantly.

Most people go the route of renewing their plans quickly with the same insurance company each year. However, you have complete freedom to find a new insurance company. Ideally, look for new options about a month before your policy expires. Several insurance companies introduce new features or add-ons regularly. Look for policies offering enhanced coverage at competitive costs. Evaluate all options before completing the car insurance renewal process.

It’s time to dispel these myths and embrace the truth about car insurance. Understanding the nuances of insurance helps you make informed decisions about your vehicle and finances. When you’re ready to purchase a policy or renew your existing one, visit the Zuno website to evaluate our plans and find the ideal policy for your needs.

ARN: Zuno/Blog/Common car insurance myths/05/24/05.

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