Topmost Car Insurance Myths – Busted

Do you know everything about the car insurance your broker or insurance company is offering you? You probably don’t!

Like in driving, where most of us are in misconceptions such as “I am perfect in driving and accident will never happen to me” or “that animal (dog or cow) will not jump in front of my vehicle” abound, the car insurance also has many myths.

This topic enlightens to the people looking for car insurance and having many myths. Read below these myths and misconceptions busted:

• Myth: Buying Car Insurance is a clumsy and complex process

Reality: Buying best policy plan or renewing car insurance has never been easier.

The process has become easy with internet technology. Through filling some basic information, customer will get an instant quote of premium plan and can get policy at their place by following few steps.

In case of policy renewal, some insurance companies follow advance technology such as Photo Quote option, wherein customers only need to upload photo of the existing policy. After that, they will receive a quick quote to renew their policy.

• Myth: If I will change my insurance company to another, I will fail to get my NCB (No Claim Bonus)

Reality: Customer will get their NCB bonus whether they change their insurer

Customers will get NCB benefits if they don’t file any claim during the policy period. This benefit will be added as a discount to the premium for next year renewal. And, yes definitely NCB is transferable to other insurer. Customers should make sure the transferable period while purchasing the policy. Some insurers provide this till the expiry date and some other consider within 90 days of expiry.

• Myth: Car Insurance Policy gives protection against accidents only

Reality: Insurance is not only covers accidents. It also covers against man-made and natural disasters.

Car insurance also provides protection against the losses/damages incurred by the natural disasters such as earthquake, flood, storm, hurricanes, landslide etc. and man-made disasters such as terrorist activity, theft, riots etc.

• Myth: If an accident incurred, the only way is to pay from pocket first and then follow many difficult claim process

Reality: Either the customers need not to pay or if pay, they will get reimbursed afterwards.

Customers can find a list of networked garages in their area online i.e. the one associated with the insurers in their list. In this case, insurer will directly settle the expanse with the garage without any issue.

In case, if the customers are unable to visit a networked garage for some reason, they can claim reimbursement and insurer will pay them directly.

• Myth: If my car has been damaged /lost, I can claim a total sum that will be equivalent to the price of a new one.

Reality: This is not the true logic.

The real fact is that if a customer files a claim, he/she will get the financial support of the condition of the vehicle, which was in before the damage occurred. The true value is calculated on the basis of the current value and depreciation rate of the car.

Also Read

List of IRDA Approved General Insurers

IRDA circular about Rejection of Claims

List of Top 5 Insurers in Canada

Here is a list of top 5 insurers in Canada:

• Empire Life

Established in 1923, the company is one of oldest insurance companies in Canada. Empire Life has 29,880 partners with professional financial advisors, agents, managing general brokers, group producers and mutual fund dealers. The top brand has offered its services to more than 7,000 clients.

Empire Life offers a full range of financial products and services include Life insurance and critical illness coverage, group life and health benefits, RSP plans and investment options.

Read more at Empire Life

• AXA Canada

With a strong network, AXA Canada has distinctive business portfolio, serving more than 100 million smiles in 64 countries. The company is providing its expertise in Property/Casualty, Life & Saving, and Asset Management.

The strategy, technologies and multi-channel distribution used in the business model allow its customer to select for best services.

The company is spread in Europe, North America, America and Asia Pacific with its wide and diverse networked operations and made its reputation in high-growth markets.

Read more at AXA Canada

• Blue Cross Canada

The company is a renowned name in Canada, known for reasonable, quality supplementary individual health and travel insurance coverage.  Blue Cross Canada also offers its trustworthy and personalized services for group benefits and group life insurance.

The plan offered by the company allows its customers to save on medical, vision care and more services across Canada.

Read more at Blue Cross Canada

• Gore Mutual Insurance Company

An outstanding company in insurance industry, the company commits to provide its excellent services to the customers.

Established in 1839, the company is one of the oldest Canadian Insurers. It is names as the first insurance company in British Columbia and Ontario according to the IBABC (Insurance Brokers Association of British Columbia) and IBAO (Insurance Brokers Association of Ontario).

Read more at Gore Mutual Insurance Company

• Hub International

The company provides property/casualty, life and health insurance to its customers. Additional services such as investment and risk management solutions and employee benefits are also offered by the company.

Ranked among the top brands worldwide, Hub International was established with the merging of 11 private Canadian insurers in 1988.

Read more at Hub International

Know the coverage in Home Insurance Policy

Today’s lifestyle has been gradually changed. Because of the life full of stress in day-to-day affairs, human-beings are dependent on machines, so household possessions have increased considerably.

Life of every human-being is unimaginable without Fan, AC, Refrigerator, Washing Machine, Microwave and more. Whenever, a person buys an appliance, he/she have to keep in mind the wear and tear condition of that and the maintenance cost allied with it.

Generally, each appliance comes with a manufacture warranty period of one-three years. During this period, Manufacturer Company takes care of the damages.

After this warranty period, how you decide to pay for the maintenance of the appliances? Home Insurance offers this coverage.

Customers have two options whether they can extend warranty period by manufacturer or can buy home appliance insurance cover.

• Is extending the warranty period worthy?

Extending the warranty period is a one option to opt for once the warranty period comes to expire. Retailer might force customers to extend it. But extend the warranty for each appliance turns out to be more expensive.

• Why to buy insurance coverage to household goods?

There may be many causes that can lead to the damage of the household goods. Damages such as mechanical breakdowns, physical damage, theft or natural disasters or damages due to power fluctuations may lead a major loss. Through home insurance, customers can claim compensation.

Now-a-days, to attract the buyers, dealers are selling appliances with insurance policies. Customers should read the fine print carefully before they take the plan.

• Selecting Home Insurance Policy Plan

Buying home insurance policy is the best option for everyone. Extending warranty of each appliance might be expensive. This insurance policy comes in a package that covers against:

• Domestic appliances
• Damage due to fire
• Baggage cover
• TV, DVD and music system
• Jewellery and other valuable
• Theft
• PA cover
• Coverage of house

While buying the policy, one should opt for the plan as per their requirement. If a person lives in a rented house, there is no mean to buy a vast coverage plan.

Also Read:

Are Private Sector Insurers as Trustworthy as Public Sector Insurers?

How to Get Easy and Speedy Insurance Renewal?

Renew Policy with Same or Different Insurer Online

Know Limits and Restrictions Levied in the Health Insurance

How to Opt for a Safe Insurance Company?

How Insurance Company Decides Auto Insurance Premium for a Customer?

When purchasing for best-suit auto insurance, the insurance company collects information in order to quote the amount of the premium. Common information such as car manufacturer name, car model, social security number and estimated miles driven per week are asked by the insurer to the policyholder.

Apart from this information, insurance company also inquire the lifestyle, education level, occupation, number of the children for the auto insurance policy.  Here is the inside scoop on this topic:

Classification to Calculate Risk

To disregard the ambiguity, insurance companies rely on predicting the risk depends on the many factors such as accident occurrence, vehicle theft, any type of damage or loss related to vehicle and the how many times claims are done for that.

In general, insurance agent or company spend about 10-15 minutes with the customer that is not enough to understand the risks factor. So they analyse the risk by filling a statistical data.

Insurers also use predictive modelling techniques to categorized customers based on the statistical data information. Some personal information is also gathered that can either boost or minimize the cost of auto insurance.

Financial Status

Insurance companies also analyse customers’ CIBS (Credit Based Insurance Score) based on the various information such as payment history credit accounts, bankruptcy etc.

Each insurance company has its own protected system to calculate the CIBS of the customer. In case of bad credit record, insurance application may be rejected. Moreover, maintaining good credit record and paying bill on time can save money on the insurance.

Customers’ Lifestyle

Single person are perceived as more risky than the married people. Occupation and education also play a great role in deciding the premium. If you are either an engineer or teacher or scientists, you have to pay a lower premium.

On the other hand, if you are currently enrolled in college and receiving good grades, it will help you get lower premium. Multiple insurance policies also help in lowering the policy premium.

How, Where, When and What Customer Drives

New vehicle has more chances of replacement in case of damage and so will always cost more to cover than old vehicle. How you drive, accidents occurrence and geographic location also matter in analysing premium for insurance policy.

FAQ about Auto Insurance Policy

List of Top Five Insurers in Germany

Here is a list of Germany’s Top five insurance companies:

1)    Munich RE

One of the largest insurance and reinsurance groups, Munich RE offers a wide range of insurance products and assistance.

Services offered are Comprises Composite Risk Solutions, Advice on Balance-Sheet Management, Widespread Consultancy. The company also provides its services in healthcare with its aim to provide affordable across the world.

ERGO, Primary Insurance Group of Car, Property, Health and Life insurance with Reinsurance operations has named as Munich RE in 2009.

Know more about Munich RE

2)    ERGO Insurance Group

Topmost company in Germany, it has its operation in more than 30 countries across the world. Products offered are Life, Car, Health and Home insurance for all type of business enterprises.

The company also provides comprehensive range of Financial, Annuities and Consultancy Services.

Know more about ERGO Insurance Group

3)    Generali Deutschland

With an extensive variety of products, the company offers primary insurance and related financial services for all small, medium and large size clients in Germany.

Generali Deutschland offers its clients optimum solution with innumerable sales channels. Products offered are Life, Property/Casualty and Health insurance.

The brand portfolio is made up of nine brands, in which four insurers are multi-line having collaboration with five single-line insurers.

Know more about Generali Deutschland

4)    Allianz

One of the greatest insurance companies, Allianz is offering its services in more than 70 countries with happy smiles of approximate 85 million customers.

Insurance products offered are Life, Health and Property/Casualty for both personal and corporate clients. Assistance services, Global Corporate Customers, Global Automotive and Reinsurance and many services are offered at the company.

Know more about Allianz

5)    ARAG Group

One of the top international companies, the group operates in 15 countries all over the world including United States. The company is the leading family-owned enterprise functioning as a versatile, popular and self-regulating quality insurer.

Products offered at the company are composite, life and health insurance.

Know more about ARAG Group

How to Pay Premium Plan for Life Insurance Policy

Premium for life insurance is paid yearly. But there may be a risk of policy lapse if the premium is not paid on or before expiry. Life insurance plan has many options to pay the premium. Customers can select as per their convenience.

•   Online Mode

To pay online, customers can log on the website of insurance company and select online premium payment option. Information such as PAN and policy number is required to fill the form. Payment options available are Net Banking, Debit Card, Online Banking and Credit Card.

One should make sure that he/she has saved the online premium paid print/receipt copy provided by the insurer after completion of the process.

Payment can also be processed by filling the bank specifics of the insurer on the bank of policyholder.

•   Auto Debit Mode

One of the most convenient option, wherein the customers can place an auto debit instruction by using their credit card with the insurance company. They can also do this by registering an ECS or NACH.

Insurance companies already have collaboration with banks or other electronic bill processing machines. After registering through this process, the premium amount will automatically deducted on or before the scheduled date. In this case, relevant form is required to fill with cancelled cheque that will be submitted to the insurer.

•   Branch Drop Box Option

Insurers also have collaboration with the banks to offer the cheque drop facilities. This premium cheque can be submitted to the insurer or the insurance broker. Online NEFT and RTGS option are also available.

•   Mobile Phone Mode

Premium payment of life insurance policy can be processed through phone. This process is done by calling an assigned authorized person of the insurance company. Credit card information is needed to make payment done.

Know your Rights and Duties for Policy

How to Get Easy and Speedy Insurance Renewal?

Renewing insurance policy is a tricky challenge but taken wisely can make smart decision. Moreover, launches of many online portals for comparing premium plan and purchasing with lots of benefits is a great way to save money as well.

Here are some tips to get easy and speedy insurance renewal:

•   Get Renewal of the Policy on Time

If the renewal of the policy is not done at the expiry of policy, customers have to pay some penalties. So the best thing is to done renewal on time to avoid such penalties. Best way is to start working on renewal before expiry because it will take some time in searching, comparing and opting for the right one. Customers can also choose different insurers for renewal by comparing various competitive plans from various insurers. This will help to get renewal easily.

•   Get Set Ready Your documents

Get ready all your earlier policy documents and claim-related papers. At the time of the renewal, insurers need these documents to read the claim history and provide the profits such as No Claim Bonus (NCB) accordingly.

Also manage your documents and check the list such as manufacture name of the vehicle, car model, registration city, brand details, RTO address etc. These factors are also important at the time of renewal in order to avoid any issues.

•  Get Easy Renewal from Online

Now everything has become easy due to internet. Getting renewal online is a brilliant option. It saves time and avoids complex manual paperwork. Just register online at the insurer’s website and fill all the necessary information mentioned with important documents. After filling all the requirements, click on the renewal button or tab.

Make sure, you have filled all the details including insurance policy number, registration details and information correctly.

After submitting the information, the insurer will send you a quote shortly. This is the easiest and speedy way to get renewal without any hassle.

Option to Select Different Insurers for Renewing Policy

If the policyholder wants to renew the policy from different insurers, he/she can select that. Customers just need to collect all the documents and other required information of the previous year’s policy.

One should keep the points in mind in order to avoid hassles.

Also read How to Lower the Cost of Car Insurance Renewal?

FAQ about Auto Insurance Policy

How much Auto Insurance do I need?

As per the Insurance Law, Third Party Liability insurance is obligatory for all vehicle owners. But in case of the major damage (accident), this third party liability insurance may not provide enough coverage. The policyholder for that unwanted circumstances may have to pay additional expenses out-of-the-pocket. To determine how much motor insurance do you need, below are the key points to be taken into consideration:

•    The value/price of the assets
•    What vehicle the policyholder drives
•    How and when the policyholder drives
•    With whom, policyholder is driving the vehicle

How can I compare Auto Insurance Quotes with various Insurance Companies?

It is very simple now-a-days to compare insurance quotes from various insurance companies. Insurance brokers/agents will provide end-to-end information of each insurer with their insurance plan. Online portal is also one of the fastest plan, from which customer can compare premium plan from different insurers. The process can be done in just a few clicks.

How I can minimize my Auto Insurance costs?

There are some factors from which a customer can reduce auto insurance costs. The vehicle a customer drives, will greatly affect the premium of the insurance. To minimize, customers have to drive in safer mode. Customers can also modify the vehicle to make it safer or lower-risk by adding anti-theft devices/features like anti-lock brakes. Picking a maximum deductible and ensuring that the coverage does not lapse, may keep the auto insurance costs down.
Customers can also keep their driving record clean, which is the most considerable factor in minimizing the insurance costs. Cutting down on the driving miles can also save the costs.

How do I find the lowest Motor Insurance rate for me?

To find the lowest motor/auto insurance rate, customers should make a convenient time to compare the services from various insurance providers. They can also do that by getting help from insurance agent/broker or can go online directly.

Why do insurance companies use my aforementioned insurance information?

While purchasing or renewing the policy plan, insurers may review the history of the customers’ insurance services and utility with previous insurer to check the quality of policyholder. Sometimes insurers use the information of the customer to make customer feel comfortable in selecting the suit-plan as per the requirement.

Also read -> How to Opt for a Safe Insurance Company?

Basic Concept of Auto Insurance – Understanding the Coverage

Note: All the private and public sector insurance companies are governed by IRDA (India Regulatory and Development Authority).

Auto Insurance coverage provides financial protection if the policyholder causes an accident that damages other person’s car, property, injuries etc.

In order to find the best-suit coverage, one must know which type of insurance coverage is offered and what other add-ons can be beneficial. For this, customer must know the types of coverage and premium cost of each.

Low premium policy covers minimum coverage, so one should know the add-ons to get the coverage plan as per the requirement. Here is the brief list of coverage in which some coverage is must-have, come are optional and some are add-ons beneficial.

1)    Must-have Coverage

Auto liability coverage necessary for all vehicle owners includes

•    Bodily Harm Liability

The coverage costs against the body injuries or death of others caused by policyholder.

•    Property Damage Liability

The coverage costs for others’ property damage such as vehicle or building that is caused by policyholder.

2)    Needed Add-ons Coverage

Most of the coverage needed frequently:

•    Medical Expenses Coverage

The coverage gives reimbursement for medical expenses for policyholder’s injury or body harm.

•    Uninsured Motorist Coverage

The coverage provides the cost when an accident is occurred by an uninsured motorist or hit-and-rum case.

3)    Optional Coverage

Optional coverage assures the care of the damages to the policyholder’s vehicle.

•    Collision Coverage

This coverage provides the cost of damages incurred to the vehicle as a result of collision with another vehicle or other object such as pillar or tree. Collision coverage does not cover losses such as Wear and Tear, Mechanical Breakdown, Uninsured accessories like Gas Kit, Bi-fuel, and Tyres.

•    Comprehensive Coverage

This coverage provides protection against theft or damage caused by natural or manmade disasters such as fire, earthquake, detonation, flood, cyclone, storm etc.

•    Glass Coverage

Most of the insurers do not include glass coverage. But customers can get coverage such as Side Windows, Rear Windows and Glass Sunroofs.

Above mentioned type of the vehicle coverage is offered by the insurers. Customers can select one as per their requirement.

Get more IRDA Guideline

Six Myths People Believe about the Auto Insurance Policy

Before buying best-suit insurance plan, one should understand the terms and information covered in the plan affecting the cost and coverage. Moreover, customers may have myths in their plan. So they should know the truth and fiction involved. A wisest consideration is to know these myths and the real facts:

Myth 1: The colour of the vehicle concludes the cost of auto insurance

The colour of the vehicle is not included in the factors determining the cost of the insurance. What does matter is the type of the car, model, engine size, the age of the vehicle, age of the policyholder, driving record and credit history.

Myth 2: Credit has no effect on Insurance rate

Customers’ credit-based insurance score matters. The reason to take this into consideration is to know how well a customer manages financial affairs. Insurance policy, renew of the plan, insurance coverage and record of claim comes in credit score. The people having good credit record end up paying small premium for insurance when insurance scores are factored into the pricing equation.

Myth 3: Insurance policy covers the policyholder if the car is lost, destroyed or damaged by falling tree fall, storm, flood, fire etc.

Customers should know that all the insurance policy is not covered the terms mentioned in this myth. These all will be in control, if the customer opts for comprehensive & collision coverage along with the standard liability coverage. Many insurers offer additional coverage, which can help you protect from various important factors. So, know all the plans before purchasing.

Myth 4: Customers need coverage of only the minimum auto liability insurance

According to the Insurance law in India, all vehicle owners should have minimum third party liability coverage. This is done to protect other persons, who suffer because of damage/loss done by the policyholder. But chances are that vehicle owner needs more insurance coverage than third party liability because accidents often cost more than the minimum limits. Getting minimum cover means to pay more out-of-pocket for losses incurred in an accident.

Myth 5: If person other than policyholder drive vehicle, their insurance also cover in case of accident 

Insurance offers coverage of the policyholder, not the person who is driving the vehicle. Make sure this from the insurance company while purchasing the insurance. Most of the insurers also offer coverage of policyholders’ driver.

Myth 6: Personal auto insurance gives coverage for both personal and business use of the vehicle

Personal auto insurance will not cover if you are using vehicle for business purpose. For this, one can opt for commercial auto insurance by keeping a good driving record.

Also read -> Factors Determine the Cost of Health Insurance 

Renew Policy with Same or Different Insurer Online

If you are planning to renew your policy plan with same or different insurer, you can do that online. Below are the points which will help you getting information for the related topic:

Renewal with Insurer Online

Comparing insurance from various insurers, buying and renewing is now easily done online. You can renew the plan with same or different insurers. Even if the customer is looking for a different insurer to renew the policy, he/she can do that easily. Many insurers offer their services for renewing policy. They require your information and previous year policy documents.

Select Payment Mode Online for Policy Renewal

The online process is very easy and speedy as manual mode is a complex and time consuming process. Through online mode, customers can get instantly the renewal policy documents via email and get a message alert on their register mobile number.

Many convenient payment modes are Debit Card, Credit Card, Online Internet Banking and Net Banking. EMI mode is also offered by various insurers.

Use Mobile App

Now-a-days insurers have launched Mobile App for quick and easy process even when the customer is on-the-go. Customers can get alert from the app regarding any policy update and can check the status. In case of lapse of the policy, they can also upload a photo via their mobile app easily. Policyholder can make their premium payments via Mobile App.

Fix Aide Memoire to the Insurers Website

It is advisable to all the customers to set reminder on the insurer’s website, so that they can give you alert before the expiry of the policy. By setting this, insurers also give updates and offers timely to the customers. Policyholder can also set this on their mobile app to get easy services.

Make sure that while getting renewal online, you have all the required information including vehicle number, model, manufacturer details, policy number, registration details and previous year policy documents.

Above mentioned time and money guidelines, can help to get hassle-free and easy renewal of the policy.

Read IRDA Guideline to know more

If you like the information in the above topic, please comment below. You can also tell us your suggestion to discuss more about the renewal.

How to Lower the Cost of Car Insurance Renewal?

Below are the points to lower the cost of car insurance renewal:

Compare the Renewal Plan from Various Insurers

At the time of renewal, most of the policyholders select the offer from their existing insurers and do not even compare quotes from other insurers. This may often lose out the probability of getting down the price of car insurance renewal.

It is advisable to compare the renewal quote from other insurers as well. There are lots of insurance brokers available online, which offers online service in order to compare competitive plan from various companies, buy and renew their car insurance policy through one user-friendly platform.

This will give you best deal on your policy renewal.

Get the Benefits, Which are Required

Insurers give many attractive additional benefits in the policy coverage, which may cost more money. It is wisest if the customers select only the specific features which they require and eliminate unnecessary cover they don’t consider relevant.

How to Opt for a Safe Insurance Company?

Grab No Claim Bonus (NCB) Benefit

NCB is the greatest benefit, which any policyholder can gain. This bonus is made if the policyholder does not make any claim during the policy period. NCB benefit is gained as a discount on the premium paid at the time of renewal, which increases with every claim-free year.

Opt for Voluntary Deduction

Voluntary Deduction is the amount that policyholders have to pay during claim settlement. If the customers pay a higher amount towards the voluntary deduction part of the policy, they have to pay low premium for a certain time, which will help in saving the cost of insurance renewal.

Do Early Renewal before expire

Some insurance companies set prefix duration to renew the policy. After closing of the date, they raise the renewal cost. Customers have no choice but to accept the higher price.

One best thing customers can do is to start working towards the policy renewal a minimal of one month prior to the schedule renewal date. So that some time is spent in analysing, comparing and opting for best renewal plan at the reasonable price before the current policy lapse. Generally pre-set time for renewal is 30 days in most of the companies.

Get to know more about Motor Insurance