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Myths about Car Insurance

November 2016

It is imperative to thoroughly understand the insurance policy you are buying, no matter what type of insurance it is. When looking for a car insurance people are hindered by numerous misconceptions. Let's go through those myths which people still carry while buying car insurance.

If your car meets with an accident while being driven by a third person the car insurance policy may not work in such a case. If above is the case, the claim will be paid off through your own policy and not through the policy of that third person who drives the car. However, sometimes the car insurance covers the damage to the car in case of an accident only, and only when the car is driven by the owner or policyholder while in case of an accident.

It is strongly seen that people think that the colour of the car always affects their car insurance premium. The Red colour of the car bears higher premium than normal. This is not true. Colour of the vehicle has no impact on your insurance premium. Rather, your car insurance premium depends on several other important aspects such as the age of the car, past records of accidents with claims, chassis, make, engine and the size of the car.

Buyers are observed to avoid comprehensive car insurance stating that they are good drivers and don't require a comprehensive policy. This justification is baseless since even expert drivers could have accidents. A comprehensive insurance policy protects you from other liabilities as well, apart from the accident itself. It safeguards your car from any loss or damage out of theft or natural and man-made calamities.

Your private car insurance will not cover your car if you are using it for business or office use. Private car insurance will only cover your vehicle when used for personal use. To extend the cover of your car insurance, you need to take passenger car insurance. Also, your comprehensive car insurance does not cover your personal belongings left in the car. You need to extend your cover to cover your personal belongings as well.

Your credit score does count. It does affect your car insurance premium. Insurance companies believe that there is good correlation between claim filing history and credit score. Those with a good credit score are less likely to file a claim. Hence, some insurance companies may offer you a discount if you have a good credit score.

Most of the people think that they already have car insurance for their old car so they don't have to buy one for their new car. Wrong! Your old car insurance won't cover the damages or any harm to your new car. So, one needs to purchase new car insurance for a new car.



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