Does the colour of your four-wheeler determine insurance cost? Here are 5 car insurance myths
Always be aware of what your policy covers, and consider comprehensive coverage if it aligns with your needs
- Oct 10, 2023,
- Updated Oct 10, 2023 11:55 AM IST
Car insurance is an important investment for any vehicle owner. However, it is a topic that often seems shrouded in mystery. Plenty of myths and misconceptions exist about how it works, what it covers, and how to get the best deal. To help you navigate the world of car insurance more effectively, let's debunk five common car insurance myths:
Myth 1: Insurance cost is higher for red-coloured cars
Fact: Many believe owning a red car will increase insurance premiums. However, the colour of your vehicle has no impact on your insurance rates. "What really matters are factors like the make and model of your car, driving history, and where you live. Insurers determine premium rates based on risk factors, not the colour of your vehicle," says RakeshGoyal, Director, Probus Insurance Broker.
Myth 2: Minimum coverage is always enough
Fact: Some drivers opt for the minimum required insurance coverage, thinking it will save them money. While this approach may reduce your premium, it can leave you financially vulnerable in the event of an accident. "Minimum coverage might not cover all the costs associated with a serious accident, so it's often advisable to consider higher coverage limits to protect your assets adequately," says Goyal.
Also read: NPS, PPF or VPF? Where should you invest your money?
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Myth 3: Your insurance covers all types of accidents
Fact: The car insurance policy covers specific types of accidents and incidents. It typically covers collisions, theft, vandalism, and liability for injuries or property damage you cause to others. However, it doesn't cover every scenario, such as damage due to natural disasters, normal wear and tear, or accidents while driving for rideshare services like Uber or Lyft. Understanding the scope of your coverage is essential to avoid surprises during a claim.
Myth 4: Your insurance follows the driver, not the car
Fact: "Contrary to popular belief, car insurance typically follows the vehicle, not the driver. This means that if someone borrows your car with your permission and gets into an accident, your insurance will likely be the primary coverage. However, coverage may be limited or denied if an unlisted driver or someone without permission uses your car. It's crucial to list all regular drivers on your policy to avoid potential issues," explained Goyal.
Myth 5: Comprehensive coverage is always too expensive
Fact: Comprehensive coverage, which covers damage to your vehicle from non-collision events like theft, vandalism, or natural disasters, is often considered too expensive by some. While it does add to your premium, it can be a wise investment, especially if you live in an area prone to such incidents. The cost of repairs or replacing a stolen vehicle can far exceed the additional premium for comprehensive coverage.
The bottom line
In conclusion, understanding the facts about car insurance is essential to make informed decisions. Don't be misled by common myths. Remember that factors like your vehicle's colour do not affect your rates, and opting for minimum coverage may not provide adequate protection. Always be aware of what your policy covers, and consider comprehensive coverage if it aligns with your needs.
"Ultimately, it's crucial to review your car insurance policy regularly and consult with your insurance provider to ensure you have the coverage that suits your needs and offers peace of mind on the road. Car insurance is not one-size-fits-all, so debunking these myths can help you make the right choices for your unique situation. An informed customer is best placed to maximize the benefits of their automotive insurance investment," added Goyal.
Car insurance is an important investment for any vehicle owner. However, it is a topic that often seems shrouded in mystery. Plenty of myths and misconceptions exist about how it works, what it covers, and how to get the best deal. To help you navigate the world of car insurance more effectively, let's debunk five common car insurance myths:
Myth 1: Insurance cost is higher for red-coloured cars
Fact: Many believe owning a red car will increase insurance premiums. However, the colour of your vehicle has no impact on your insurance rates. "What really matters are factors like the make and model of your car, driving history, and where you live. Insurers determine premium rates based on risk factors, not the colour of your vehicle," says RakeshGoyal, Director, Probus Insurance Broker.
Myth 2: Minimum coverage is always enough
Fact: Some drivers opt for the minimum required insurance coverage, thinking it will save them money. While this approach may reduce your premium, it can leave you financially vulnerable in the event of an accident. "Minimum coverage might not cover all the costs associated with a serious accident, so it's often advisable to consider higher coverage limits to protect your assets adequately," says Goyal.
Also read: NPS, PPF or VPF? Where should you invest your money?
Also read: Gold and silver prices today: Yellow metal recovers after heavy sell-off; price rises by 1.23%
Myth 3: Your insurance covers all types of accidents
Fact: The car insurance policy covers specific types of accidents and incidents. It typically covers collisions, theft, vandalism, and liability for injuries or property damage you cause to others. However, it doesn't cover every scenario, such as damage due to natural disasters, normal wear and tear, or accidents while driving for rideshare services like Uber or Lyft. Understanding the scope of your coverage is essential to avoid surprises during a claim.
Myth 4: Your insurance follows the driver, not the car
Fact: "Contrary to popular belief, car insurance typically follows the vehicle, not the driver. This means that if someone borrows your car with your permission and gets into an accident, your insurance will likely be the primary coverage. However, coverage may be limited or denied if an unlisted driver or someone without permission uses your car. It's crucial to list all regular drivers on your policy to avoid potential issues," explained Goyal.
Myth 5: Comprehensive coverage is always too expensive
Fact: Comprehensive coverage, which covers damage to your vehicle from non-collision events like theft, vandalism, or natural disasters, is often considered too expensive by some. While it does add to your premium, it can be a wise investment, especially if you live in an area prone to such incidents. The cost of repairs or replacing a stolen vehicle can far exceed the additional premium for comprehensive coverage.
The bottom line
In conclusion, understanding the facts about car insurance is essential to make informed decisions. Don't be misled by common myths. Remember that factors like your vehicle's colour do not affect your rates, and opting for minimum coverage may not provide adequate protection. Always be aware of what your policy covers, and consider comprehensive coverage if it aligns with your needs.
"Ultimately, it's crucial to review your car insurance policy regularly and consult with your insurance provider to ensure you have the coverage that suits your needs and offers peace of mind on the road. Car insurance is not one-size-fits-all, so debunking these myths can help you make the right choices for your unique situation. An informed customer is best placed to maximize the benefits of their automotive insurance investment," added Goyal.