Top 5 Car Insurance Myths Busted

There are quite a few myths associated with car insurance. We may have believed them to be the truth since long, but they are in fact nothing more than myths perpetuated over the years.  Let us here talk about the few most common myths regarding car insurance.

  1. Red colored Cars cost more insurance

Quite hilarious indeed, but this is absolutely untrue. The color of the car has no say while deciding the cost of your four wheeler insurance. The premium of the car insurance is decided by its model, the year of the manufacture or the age of car, the engine quality and capacity, the maker, past claims history, and other such factors but definitely not the color of the car. In fact, no one even asks the color of the car when you go for a car insurance renewal.

  1. Higher the insurance amount, more the coverage

When you plan to go for a car insurance and survey the insurance market, comparing different insurance prices of different companies, you will observe the vast difference in their quoted price. The price quoted by one company may be too high or too cheap as compared to the other insurance company. This doesn’t mean that the company charging higher will provide you more coverage. So when you compare the prices, you also need to compare wisely on what exactly they are covering.

  1. Car insurance strictly covers only accidents

This is yet another popular myth associated with car insurance. Many of us believe that an unfortunate nature’s wrath like earthquakes, tornado, cyclone, flood, storm, hurricane, hailstorm, inundation, frost, landslide, a lightning strike, and such natural accidents are not covered by the insurance company. But most of the car insurance plans do cover these natural calamities. Along with the mishaps like robbery, theft, riots, terrorist actions, damage caused in the transit, and others, the car insurance also covers the events which are not under your control.

However, the insurance company does not cover everything. If the company finds that the damage to your four wheeler was done intentionally or on your negligence, the company may not go ahead with the claim. For example, if you are caught in drunk driving accident, you may not get the claim.

  1. The insurer charges higher premium on new cars

One should immediately shed this popular myth which says that the premium of a new car is higher than the old car. Actually the fact is vice versa, the insurer charges more premium for the old car. This happens because the insurance companies find it much more difficult and expensive to repair the damage done to the old four wheeler and replacing its parts as compared to the newer cars. It is pretty obvious that the older car would need more service intervention and would be susceptible to more damage since the parts of the old car are deteriorating. It would hence need more repairs as compared to a new four wheeler. This is the reason why the insurer charges more for the old cars.

  1. Insurance is non transferrable

The buyer can easily transfer the insurance in the name of the seller. The insurance company may charge some nominal amount for this and may demand a written letter from the buyer stating the name of the seller along with other details. After authenticating the written letter and receiving the fee for the insurance transfer, you can actually transfer your insurance. At times, the insurance company may ask you to fill up a form which they provide along with the transfer letter. Once that is done, the transfer process of insurance is quite easy and non-cumbersome.