Pre-conceived ideas and misinformation about the process of obtaining car insurance can intimidate a new buyer. This article covers some of the major misconceptions that confuse car owners when getting their cars insured.
Planning to buy a new car? Have you thought about insuring it? You may come across various kinds of information regarding car insurance shopping. It is important to separate facts from fiction to distinguish reliable information from misleading ones. Here are some of the myths that you may encounter:
- I can Only get New Insurance Policies through My Dealership
Automobile dealerships have tie-ups with a few insurance companies, and they only facilitate the sale of these policies by adding it to the final invoice amount when you pay for your car. However, you are never obligated to buy the policy from the dealership. And many times, it can save you a lot of money too. You can customise the policy according to your needs, add/remove add-ons and even get more competitive quotes. In case you are buying a policy from outside, you will need to have a valid car insurance policy before you take possession of the car from the dealership.
2. Changing Insurance Companies or Car Means Losing Your No Claim Bonus
Many people fear that changing their insurance providers or selling their car will make them lose their ‘NCB’. NCB or ‘No Claim Bonus’ is accumulated when you don’t file a claim for a year and you can claim a discount on premiums the next year. Since they are attached to the insured and not to an insurance policy or a vehicle, your NCB will get transferred to your new plan even if you change the insurance company or buy a new car.
In case of selling your car, you will have to get an car insurance NCB preservation letter from the insurance company that will help you transfer the benefit of the bonus to the new policy when you buy a new car.
3. Third-Party Car Insurance is Enough
As per Indian laws, Indian car owners must have at least a third-party insurance policy. But a third-party policy only pays for damages caused by your car to third-party (individual or property). It does not cover you for the losses suffered by your car. A comprehensive car Insurance plan additionally pays for the repair of your car if it gets damaged, due to another driver’s fault, your own mistake or any natural calamity. While third-party insurance premiums may be lower, a comprehensive policy provides more extensive coverage.
4. My Credit Score or My Car Colour will Impact the Insurance Quote
Contrary to popular notions, your credit score or the car’s colour doesn’t affect new car insurance premiums. Factors such as your age, gender, car model, presence of safety features, the purpose of the car, fuel type, driving record, number of claims already taken from the insurer, deductible and place and year of car registration affect your premium amount. You can also get a discounted rate of premium for being a member of the Automobile Association of India, Vintage Cars, and for installing anti-theft devices approved by the Automobile Research Association of India (ARAI).
5. Claiming Procedure is Troublesome, and I’ll end up Paying Out of Pocket
A reputed insurance company will have a standard procedure in place and competent officials to help you get your claim processed. All you have to do is visit the network garage to fix your car, and your insurer will directly settle the bill amount with the garage. A trustworthy insurance company will never let you pay for anything that is already covered by the policy you bought.
Make sure you read the conditions carefully while going through the benefits mentioned in your insurance policy. In case your car for repair at a garage that is not part of the network of the insurance company, you can also get reimbursed for the expenses later.
Buying a Car Insurance Policy for A New Car
In an age where people are getting information quickly, it is sometimes difficult to decide what to trust. While buying a new policy, make sure to read all the terms and conditions carefully before making the payment. Choose a company that has a good claim settlement ratio, is established in the trade and has got good reviews from its customers.