Over the
past two decades, there has been a significant increase in car ownership in
India. According to the Vahan Parivahan portal, 36.7 lakh cars were registered
in FY2024-25. As more Indians purchase cars, many still hold onto common car
insurance myths. Such myths can potentially expose you to financial risk.
"Despite
having access to information online, many car owners still fall for common
insurance myths that can leave them financially vulnerable. In the event of an
unexpected accident, the cost of repairs can be substantial. It is essential to
separate fact from fiction to make informed decisions and ensure real financial
security on the road." - Shubham Moondra, Chief Product Officer at Royal
Sundaram
Let’s
debunk some of the most widespread myths surrounding car insurance:
Myth 1: Older Cars Don’t Need Insurance
Although
your car may have aged, risks like accidents, theft, and third-party liability
remain. While the Insured Declared Value (IDV) depreciates over time, a car
insurance policy ensures continued protection.
Myth 2: Insurance Doesn’t Cover Natural Calamities
A
comprehensive car insurance policy provides coverage against floods,
earthquakes, and fire. However, premiums may vary based on geographic risk
factors.
Myth 3: If There is Total Car Damage, The Insurer Will Pay Full
Reimbursement to its Invoice Value
In Motor
Insurance, the sum insured is the Insured Declared Value (IDV) of the vehicle.
As the vehicle ages, the IDV decreases annually. Unless you have a
Return-to-Invoice add-on for a wider coverage, insurers will reimburse only IDV
of your vehicle. Understanding these terms before purchasing a policy is
crucial.
Myth 4: Insurance is Non-Transferable, and No-Claim Bonus (NCB) is
Lost
Car
insurance policies are transferable when selling a vehicle. However, NCB is
attached to the customer and not to the vehicle. Hence, you can get NCB
certificate from your insurer and transfer your NCB to your new vehicle's
insurance policy. This NCB certificate is valid upto 3 years from the date of
issue.
Myth 5: If Someone Else is Driving Your Car, the Insurance Won’t
Cover Accidents
If the
driver holds a valid license and driven the vehicle with your permission, your
insurance policy will cover damages as long as they are complying with the
terms and conditions of the policy.
Myth 6: Cars in Rural Areas Don’t Require Insurance
Motor
insurance is mandatory across India, irrespective of traffic density.
Accidents, theft, and natural calamities can occur anywhere, making coverage
essential even in less populated regions.
"Car
insurance is not just a legal formality; it is your financial shield.
Understanding what’s covered ensures that you stay protected in every
situation." - Shubham Moondra, Chief Product Officer at Royal Sundaram
Stay Informed, Stay Protected
With
rising car ownership and unpredictable road conditions, being misinformed about
insurance can prove costly. Instead of relying on assumptions, make an informed
choice. A comprehensive insurance policy safeguards your vehicle, finances, and
peace of mind.
Royal
Sundaram's comprehensive car insurance provides extensive coverage, ensuring financial protection in
every scenario. From accidental damage to theft and vandalism, the policies
safeguard your vehicle against unexpected risks.