The number of deaths in road crashes in India was at an all-time high in 2022 with fatalities above 1.68 lakh. This is approximately 462 deaths per day or a death every three minutes. The number of injured persons in accidental crashes stood at 4.43 lakh and these are only the reported accidents. Unreported accidents and their financial impact would be much higher.
With the increase in vehicle sales over the last few years, having a comprehensive car/two-wheeler insurance policy is more important than ever. Motor insurance provides essential financial protection against accidents, theft of vehicles and damages to third parties. Unfortunately, many people continue to have a few misunderstandings and misconceptions surrounding vehicle insurance. In this article, we will attempt to understand and clear some of these myths.
What are the different myths about vehicle insurance?
Myth 1: Motor insurance is not required if I am a good driver
Some vehicle owners believe that car insurance is optional. Those who drive cautiously and carefully, feel they do not require it. However, this is not the right thought process. As we all can understand, accidents can happen at any time and may even happen due to the mistakes of others. Thus, every vehicle on the Indian roads must have adequate insurance with third-party liability insurance cover being the bare minimum necessity. With adequate insurance, you will be protected from any legal liability in case a third party or his/her property gets damaged due to an accident involving your vehicle. With proper insurance, you would even be protected against damages to your vehicles. Remember, being a good driver is not enough, you need to also have adequate papers and insurance taken on the vehicle.
Myth 2: Third-party cover is adequate
Motor third-party liability only insurance policy is mandatory in India. As per Indian Motor Vehicle Act 2019, if you are driving without valid motor insurance, you will be charged a hefty penalty and may even attract imprisonment. The IRDAI (Insurance Regulatory and Development Authority of India) determines the third-party premiums. The policy covers the loss or damage to a third party person or property while you are driving. Most people believe this should be sufficient but it is not. Such a policy does not cover the expenses incurred when your vehicle gets damaged. Own Damage Cover or Comprehensive policies cover your third-party liability and even protect you from financial losses due to theft, accidents, and natural disasters that damage your vehicle.
Myth 3: Motor insurance is too expensive
Car/ Two wheeler insurance offers a range of coverage, like third-party liability, personal accident and own damage cover that includes damages to your vehicle. However, multiple factors determine the premiums. For eg;
- Cubic capacity (cc) of your car - if your car’s cc is less than 1000 cc lower premiums are charged and if cc is more than 1500 cc higher premiums are charged.
- Zone - if your vehicle is registered in Zone A city (Mumbai, New Delhi, Kolkata, Bengaluru, Chennai, Hyderabad, Pune and Ahmedabad), a higher premium is charged than Zone B (rest of India).
Before making a decision, do a cost-benefit analysis of the premium against the cost of repairing your car after an accident or replacing your vehicle due to theft or total loss. What would be the cost of that? There are motor policies with different & comprehensive add-on coverages at very affordable premiums which you can customise as per your preference.
Myth 4: It is better to make and benefit from claims
Many believe that insurance is only for those people who want claims. It is only a perception that you must file claims to benefit from the policy. Motor policies offer very good discounts on premiums for careful drivers. Similarly, It is also not essential to ask the insurance company to pay for minor dents and scratches. Such a step would stop you from enjoying the no-claim bonus (NCB) and increase your premium for the subsequent years. Also, it may lead to the insurer denying some add-ons upon renewal. Therefore, it is always advisable to carefully evaluate when to use your insurance policy to file claims and to benefit from the insurance coverage without impacting your wallet or future coverage.
Things to explore before you buy car insurance:
Comprehensive motor insurance offers 360-degree financial protection for you and your vehicle. But before you decide to buy a policy, must analyze & understand the following factors:
1. Your coverage needs
Take a moment to assess your individual needs. Ask yourself what level of coverage you require. Cautious drivers and those who park in secure areas and drive less frequently may not need a high sum assured. On the other hand, people who cover long distances regularly or frequently drive through busy areas may need more protection. Consider your requirements and select a plan accordingly.
2. The various plans
Don’t settle for the first insurance plan that comes your way. Take the time to compare different policies from various insurance providers. Look beyond just the premium amount. Consider the coverage offered, the network of garages for cashless repairs, and the claim settlement process.
3. The policy inclusions and exclusions
Read the policy document thoroughly to understand the exclusions and inclusions. Different insurance plans might have varying coverage options for engine damage, natural disasters, and roadside assistance. Knowing what is covered and what isn’t can save you from surprises during a claim.
4. The add-ons
Many insurers offer add-on covers that can enhance your policy’s coverage. These may include zero depreciation cover, engine protection, and consumables coverage. Having insurance policy add-ons can give complete protection to your vehicle. To be able to enjoy the extended benefits of motor insurance, you should carefully choose insurance add-ons as per your requirements.
5. The claim-settlement ratio
Claims are the litmus test for any insurance policy. The claim settlement ratio of an insurance company mirrors its capability in processing and settling claims. A higher claim settlement ratio indicates faster claims handling and high reliability. Examine the claim settlement ratios of different insurers before deciding.
Conclusion:
Motor insurance is a crucial aspect of being a responsible vehicle owner and citizen of India. It helps to fulfil legal burdens and provides financial security in case of an untoward event. By busting common myths surrounding vehicle insurance, we’ve illustrated the importance of making informed decisions about insurance coverage. But considering the evolving needs of cars, today car owners need comprehensive protection for their vehicles to enjoy driving without worrying about financial loss. Insuring with the right motor insurance ensures a smoother journey on India’s busy roads.
