Buying a new car is one of the important milestones in an individual's life. Often, months of research and financial planning are spent to finally tick this goal off one’s list. For a valuable possession, the protection cover needs to be just as robust. This sums up the importance of comprehensive motor insurance for vehicle owners, especially those who have just got a new car.
Beyond the legal mandate of a third-party cover, investing in well-rounded motor insurance protects the vehicle owner against financial losses due to damage or theft of the insured vehicle.
However, when buying motor insurance, individuals often fall prey to certain myths and misconceptions due to the lack of awareness. Without a thorough understanding of the policy, you could end up buying a policy that isn’t favorable as per your needs or preferences, only to regret your decision later.
Here are a few common myths associated with motor insurance that new car owners should watch out for:
Myth 1- Car insurance solely provides coverage for accidents in which I am not deemed responsible
Reality: When you have a motor insurance policy, you are covered for all kinds of accidents irrespective of who’s at fault. Comprehensive car insurance also provides coverage to your vehicle in the event of damages, floods, terrorism, riots etc. However, it should be noted that damages to your vehicle won’t be covered if you are driving under the influence of alcohol. It is important to comply with the rules mentioned in your policy document. For instance, if you use your personal car for a commercial purpose and meet with an accident, you won’t be covered for the damages.
Myth 2- NCB is lost when transferring my policy to another insurer
Reality: No claim bonus (NCB) is the reward given by the insurer to the policyholder for driving safely and not making claims during the policy tenure. It is offered in the form of discounts on premium. Through this benefit, you can reduce the amount of premium over a period of time. Clearing the misconceptions, NCB is associated with the policyholder and not the insurer. Hence, it is transferable when you buy a new car insurance policy. Also, it should be noted that NCB is applicable to own damage premium that covers accidents, collisions, natural calamities, fires, and thefts, etc.
Myth 3- NCB is lost if my car is sold
Reality: The NCB is applicable to the policy and not the vehicle. Therefore, you won’t lose it if you sell your car to a new owner. NCB is a benefit earned for safe driving skills and not raising claims during the policy period. So, it is associated with the policyholder only and hence, remains intact in event of a car sale.
Myth 4-I need to take an additional insurance policy if I have a driver
Reality: You don’t need to buy a separate insurance policy for your driver. You only need to have one car insurance policy in your name. However, you need to ensure that the driver has a valid driver’s license, in the absence of which, the insurer would refuse to accept your claim in case of an unforeseen mishap.
Myth 5- The online claim process is difficult
Reality: Raising an online claim is easy. You can either visit the insurer or aggregator website from where you’ve purchased the policy. In fact, some insurers even allow you to initiate the claim on WhatsApp. You can even call the insurer’s toll-free number to get the process started. Fill out the claim form and provide your relevant details. You will be contacted once your claim is registered online. You can easily submit pictures and videos online for the insurer to assess the extent of the damage, which takes as less as 2 hours. The formalities are being taken care of by the insurer at each step. So, the process is quite simple, prompt and hassle-free.
Conclusion
There’s no doubt that having a motor insurance policy is a must, but one must read it carefully before deciding to buy. It is imperative to go through the inclusions and exclusions properly to avoid rejection of claims because of lack of understanding. It's important to steer clear of being misled by misconceptions spreading around. You can always check with your policy advisor to guide you about the coverage of your policy to make a prudent decision.
Nitin Kumar is Head of Motor Insurance, Policybazaar.com. Views expressed are of the author.