Car insurance myths — busted!

Indian law mandates every car-owning citizen to have a car insurance policy in place. Driving without is considered illegal and can lead to heavy consequences, that include penalties, legal suits, suspension of driving license and even persecution. So, it seems obvious that car insurance is your trusted friend in need. But often buying car insurance can be a difficult process to understand. Whether you buy car insurance online, or straight from the company’s office, there are certain guidelines you must follow.

There are a lot of misconceptions around car insurance that lead us towards buying a bad deal. Let’s have a look at a few common myths, and try our best to avoid them:

Myth #1: The colour of the car matters for insurance.

It’s a popular myth among many that red cars are more expensive to insure. That cannot be further from the truth. Insurance companies do not give two thoughts if your car is red or white or even rainbow-toned. What does matter though is the make, model, year, engine size, body style and other important details of the car. They also check the driving record of the insured to determine the premium amount of the insurance.

Myth #2: Credit scores don’t matter for car insurance.

Your credit score is an indication of your management skills regarding your personal finances. Insurance companies look at this number to determine interest rates and premium amounts. Therefore, make sure to maintain a good credit score.

Myth #3: My personal property inside the car is covered.
 If your expensive phone or laptop is damaged or stolen in an accident, filing a claim with your car insurance company will not get you anything. Personal property inside the car is usually not part of a car insurance policy.

Myth #4: Insurance will cover you if your car is stolen, vandalized or damaged by falling tree limbs, hail, flood or fire.
 These eventualities require the protection of comprehensive and collision coverage in a policy. It is not an automatic coverage, instead an optional benefit that you may purchase.

Myth #5: My friend borrowed my car, so he’s responsible if there’s an accident.

Insurance companies insure the car, not the driver. So in the event of an accident, you will be held responsible for any damages occurred, not your friend.