Debunking common myths of car insurance


31 Oct 2023

Cruising Through Misconceptions: Demystifying Car Insurance Myths

There are several myths and misconceptions surrounding car insurance that can lead to confusion and misunderstandings. Car insurance is an important aspect of car ownership, providing protection and peace in case of unforeseen events. Understanding the truth behind common car insurance myths is essential for making decisions and ensuring enough coverage for your vehicle. Kotak general insurance aim to debunk some of the most common myths associated with car insurance policy.

Common myths of car insurance

Myth 1: Red cars are more expensive to insure

The color of your car has no impact on the cost of insurance. One of the most common four-wheeler insurance myths is that red cars are more expensive to insure. Insurance premiums are determined by factors such as the make and model of the car, age of the driver, driving history, location and coverage options chosen.

Myth 2: Minimum coverage is sufficient

Individuals believe that purchasing only the minimum required coverage is enough to protect them in case of an accident. It is advisable to assess your individual needs, consider potential risks and opt for coverage that adequately protects you, your vehicle and other drivers on the road. While minimum coverage may be legally required, it often provides limited protection.

Myth 3: Personal auto insurance covers business use

Personal auto insurance usually excludes coverage for commercial or business-related use. Many people assume that their personal auto insurance policy covers them when using their vehicle for business purposes. If you use your vehicle for business activities, it is important to discuss and explore appropriate car policy plans.

Myth 4: The insurance follows the driver, not the vehicle

Contrary to popular belief, car insurance primarily follows the car, not the driver. This says that if you let someone use your car and they get into an accident, your insurance coverage typically applies. However, it is essential to review your policy terms and conditions, as there may be specific exclusions or limitations to this rule.

Myth 5: Full coverage means everything is covered

Full coverage generally refers to a combination of comprehensive and collision coverage. The term "full coverage" is often misunderstood. It does not mean that every possible event or damage is covered. Comprehensive coverage protects against non-collision incidents, while collision coverage covers damages resulting from a collision with another car or object.

Myth 6: Your insurance premium increases after every accident

Consider multiple factors when determining premium rates, including the severity of the accident, fault determination, driving history and overall claims history. While it is true that accidents can influence your insurance premium, not every accident automatically leads to an increase. A minor accident or a no-fault accident may not result in a premium increase, but it is always recommended to inform Kotak car insurance about any incidents.

Myth 7: Your credit score doesn't affect your insurance premium

Credit scores are considered when determining car insurance premiums. Credit-based insurance scores are used as part of their risk assessment. A good credit score can potentially result in lower premiums, while a poor credit score may lead to higher rates.


By debunking these myths, you can be more confident in the world of car insurance, choose the right coverage for your needs and protect yourself and your car on the road. Remember that insurance premiums are based on various factors. To know more, stay tuned with Kotak general insurance.

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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.