5 Myths About Vehicle Insurance Busted


04 Aug 2023

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Decisions like buying a vehicle invite many unwanted opinions. Sometimes they are helpful, but other times they can simply misguide you. It’s the same case with vehicle insurance too. When buying a car, people manage to make their way through unsolicited suggestions and misconceptions, but they get stuck in the loop of myths and prejudices when it comes to buying vehicle insurance.

The result of these myths is that not every car owner buys vehicle insurance. By doing this, they are not only disobeying the law but also putting their financial stability and lives in jeopardy. If you are a car owner who is struggling to differentiate between the myths and facts around car insurance, then let’s bust the top 5 myths about vehicle insurance here so you can make an informed decision for yourself.

The premium costs are very high

The biggest misconception that people have about car insurance is that the premium costs are extravagant and that they are nothing but just an addition to their monthly expenses. If you are not wise about your decision, then you might end up in a situation like this. But if you do your research well, lay down your needs and wants, and budget your expenses before even buying the vehicle, then the car insurance premium will not feel like a burden. There are many factors that influence car premium costs, and once you are aware of them, you can customize a vehicle insurance plan with premium rates that suit your budget.

Vehicle insurance is valuable only for new cars

Third-party car insurance is mandatory by law for both old and new cars. But is comprehensive car insurance as important for an old car as it is for a new one? Yes, it is. One might wonder why there is a need to buy car insurance for old cars since the premium rates might be comparatively higher than they are for newer cars. It is only a possibility, not a necessity, that older cars have higher premium costs. Besides, comprehensive car insurance has many benefits and offers a sufficient amount of financial cover for your car as well as your life. Another reason why you should get car insurance for older cars is that they tend to be more vulnerable than newer cars. And if you are not planning to invest in a new car anytime soon, you must try to protect the old one in every possible way.

No Claim Bonus is non-transferrable to another insurance policy

You should have the freedom to choose or switch insurers as per your desire. And you do! You can switch your insurer if you’d like at the time of renewal of your policy. If you are eligible for a No Claim Bonus, it will be automatically transferred from your old insurer to the new one. This way, you can get a new insurance policy with a new insurance company and still reap the benefits of your previous No Claim Bonus

The claim process is a hassle

One of the most popular myths or fears around motor insurance is that people think they will never get their claim amount or that their claim will not be passed on time and the benefits will lapse. This sure has happened in some cases, but if you are dealing with a good insurance company that has a good claim settlement ratio, then you do not have to fear this. Plus, you should always read the terms and conditions carefully before you buy the insurance policy so you steer clear of any hidden agendas or loopholes.

Claiming your motor insurance doesn’t have to be difficult. At Kotak General Insurance, we are always aiming to make our process simple. Watch this video to know

There’s only one type of insurance available for all vehicle owners

Besides third-party and comprehensive car insurance, there is also another distinction based on the type of usage of the vehicle, which is personal and commercial car insurance. If you are using your car for business purposes, then you must specify the same to your insurer and get commercial car insurance. It is illegal to use personal car insurance for a car that is being used for commercial purposes. You should provide the information to your insurer so they can guide you to getting the best car insurance possible.

When buying car insurance, you can use these facts to find the best deal for yourself. For a better experience, you should compare car insurance online so you can explore the best choices independently without being distracted by misinformation or myths.

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.