Finance

Busting Frequent Misconceptions About Car Insurance Plans

When you buy a car, its registration and insurance are some requirements that require immediate compliance. For you to legally drive your car, these two are a must-have condition. While the vehicle dealership takes care of the registration process, it is you who must decide upon the insurance requirements. Dealers generally offer a few insurance plans, but they aren’t always the right fit for you. Hence, it is advisable for you to do your own share of research.

A car insurance policy comes handy to safeguard against damages that are caused to another person as well as to your car. All of it depends on the type of the policy. There are various things that need to be considered when buying one. Where there is a fact, there is a misconception too. However, most misconceptions overshadow the truth underlying them. This article aims to demystify some misconceptions about car insurance plans that you need to stay clear of. Here are some of them:

Car insurance premiums are based on the colour of your car

The colour of your car is the most common misconception that you might have come across. But in reality, there is no correlation of the insurance premiums to the colour of the car. It is generally believed that cars which are white in colour are commonly sought by thieves for their higher resale value. But that has no impact on your premium. Hence, let that not be a reason to stop you from getting an insurance coverage.

A third-party cover is all that you need

Car insurance policies are available in two types, third-party plans or comprehensive policies. Protection from legal liabilities is the benefit offered by a third-party cover whereas comprehensive plans include the damages to your car too. The law stipulates a third-party plan as the minimum however, it may not be suitable in the long run. In fact, it offers the least benefit a car insurance policy can offer and hence may not be sustainable solution. Also, since the coverage is limited, the car insurance prices are at an absolute low level.

NCB is lost in case of porting your insurance company

The reality behind the myth is that NCB is transferable and can be transferred when you change your insurance company. Thus, you need not worry about losing those benefits even when you switch your insurance company. All you need to do is obtain an NCB transfer certificate from your existing insurance company and present it to the new insurer at the time of transfer/purchase.

Car insurance policy pays for all the repair costs

The terms of a car insurance policy determine what is covered by it and what isn’t. It is essential for you to read through these terms thoroughly so that any ambiguity or clarification can be sought well in advance. Moreover, when selecting among the myriad plans, it is necessary to first shortlist based on your requirement followed by a in-depth knowledge of the insurance terms and jargons.

These are some of the car insurance myths that you must not believe. Remember to be alert at all times be it purchase or car insurance renewal to get the right insurance coverage. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

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