Top 5 Misunderstood Things About Car Insurance

Having car insurance is mandatory if you own a car. While most car owners know how insurance works on a superficial level, there are still quite a few misconceptions and myths about car insurance. In a time when there’s a plethora of information available with just a few clicks, it can often be challenging to segregate between fact and fiction. Only if you have a comprehensive grasp of how car insurance works, will you be able to make the right decisions and get the right coverage for your beloved car.

To help you, here are some of the most common misunderstandings about  . Knowing the truth about them will surely benefit you as a car owner.

1. If my car is very old, I do not need insurance.

People frequently believe that replacing an old car is comparatively less expensive as its value has depreciated over time. Purchasing a comprehensive insurance plan for it doesn’t seem worthwhile to many. However, accidents can take place anywhere, anytime, so staying covered is highly recommended. An old car requires more care and can be more expensive to fix. Also, it is more likely to be stolen due to the demand for its parts. Most importantly, as per the  , it is mandatory to have car insurance, whether you own a new or old car.

2.If I am at fault, I cannot make an insurance claim.

If you have a valid driving licence, all accidents you are in are covered by your insurance policy. A comprehensive insurance policy covers accidental damage, theft, fire, damage due to riots, mechanical faults, etc. However, it doesn’t accept claims of accidents caused by alcohol or drug intoxication. It is also important to understand that the claim must adhere to the policy agreement’s terms and conditions. For example, if you have purchased a vehicle for personal use and then utilised the vehicle for commercial reasons, your accident claim will be denied.

3. If I sell my car, I will lose my NCB.

NCB describes your driving abilities. It is a personal asset that only you have access to. Even if you sell your car or change insurance providers, no one else can use it. Your NCB belongs to you and not your vehicle. Only you can receive its benefits. That’s why, even if you sell your car, you will not lose your NCB. You can use it on the next vehicle you purchase.

4.If I go for lower coverage, I will save money.

People frequently get car insurances with less coverage in hopes of saving money. However, this is one of the most common mistakes to make. Due to limited services provided by the reduced coverage, you will end up paying large sums out of your pocket for repairs and replacement. Accidents can happen no matter how cautiously you drive. In the event of theft, fire, flood, or war damage, you will face a significant financial burden. Inadequate car insurance policies can cost you more; therefore, invest in policies with broad coverage, and you will live a stress-free life.

5.If I go for cashless repairs, I do not have to pay anything.

When your car is damaged in an accident, you must notify your insurance company and contact or have your   to the nearest garage. Then, your vehicle is evaluated, and a repair quote is prepared for you to submit to your insurance provider. Your insurer pays the garage to fix your car after thorough verification. However, there are some exclusions that are not covered, e.g., some components made of fibre or rubber or damages that are caused due to normal ageing. In that case, you will have to pay for their repair out of your own pocket. You, as the policyholder, have to face the costs of deductibles and depreciation. Before making a cashless claim, you should carefully understand the terms and restrictions. If required, you can opt for add-ons like zero depreciation, consumable cover etc.


Being well aware is always advantageous. When you can differentiate a myth from a fact, you can save yourself a lot of trouble. Knowing the truth about car insurance will not only help you get the right coverage but also help you get the most out of your insurance policy.

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