7 Lesser-Known Facts About Car Insurance
Car insurance is an avenue about which there are a lot of myths. While the truth is far from real, these myths often lead to misinformation and significantly influence your purchase decision. Here seven such lesser-known facts make selecting car insurance not only a breeze, but a well-thought decision.
#1 Your claim history has an impact on car insurance premiums.
While car insurance serves as a backup for your repair woes, it is not advisable to make frequent claims too. The reason being your insurance premiums are impacted on due to frequent claims. Making repeated claims also poses you as a high-risk policyholder for the insurance company.
On the contrary, a safe driving practice is rewarded with no-claim benefits by your insurance company. This no-claim bonus or NCB starts at 20% and goes up to 50% for every consecutive claim-free policy tenure. The only thing to remember is you need to renew your policy regularly without any lapse.
#2 Claiming damages when you are at fault can lead to rejection of your application.
Negligence on your part can lead to rejection of your claim application. The insurance company expects you to take adequate care of your car. Yet there are any damages, they are insured under the policy coverage. Thus, remember that your car insurance policy is no leeway for you to ignore the safety of your car.
#3 Insurance plan can help you secure the invoice value in a claim if your car is stolen.
The above statement may be hard to believe, but yes, you can receive the invoice value of your car. It is possible only in the event where the car is damaged beyond repair or stolen and is possible using the Return to Invoice (RTI) add-on cover. You need to opt for this add-on policy in your comprehensive insurance cover at the time of purchase or renewal. The only caveat for this is that your car should not be older than five years. Make sure to use the car insurance calculator so as to determine the impact of add-ons covers on your premium.
#4 Modification to your car attracts a higher insurance premium.
Modifications, whether aesthetic or performance-based, impact the insurance premiums. A comprehensive insurance policy includes the accessories in its coverage which are provided by the manufacturer. Any modifications over and above that are excluded from the coverage. But these modifications can be covered by paying additional premiums. The insurer will assess the cost of repairs for these alterations and accordingly charge a premium.
#5 Cashless claims are not entirely cashless.
While that may sound like a bummer at first, there are compulsory or standard deductibles for every insurance policy. These deductibles are required to be paid by the policyholder at every claim and thus, even if you have a cashless car insurance policy, it is not truly cashless. You will be required to pay for the deductibles from your pocket after which the insurance cover will take over the cost of repairs subject to the policy terms.
#6 Repairing your car before an intimation to the insurance company may lead to rejection of your insurance claim.
Insurance is based on the concept of trust. Any repairs to your car without prior intimation bypass this trust and thus can be sufficient grounds for a rejection of your claim.
#7 Switching your insurer is possible without losing on the no-claim benefits.
No-claim bonus is an additional benefit offered to the policyholder for not making any claims during the policy tenure. Since these benefits are stipulated by the regulator, the Insurance Regulatory and Development Authority of India (IRDAI), they are available for comprehensive insurance policies. While switching your insurance company, all you need to do is obtain an NCB transfer letter for your insurer and submit it to the new insurance company. This way, you can enjoy the continued benefits of NCB with your new insurance company. Note that NCB benefits are limited only to comprehensive and not third party car insurance plans.
These are some nifty tips that you should remember when picking a car insurance policy for yourself. Make sure to use the car insurance calculator so as get the suitable coverage at an affordable price.
