When it comes to car insurance, there are many misconceptions about the concept among the general public. In this article, you can get insights into some of the most frequently asked questions with regards to car insurance plans. These guidelines apply for all the insurance companies in the market as they are governed by the regulatory board and there may be minor changes with regards to some features of the policy. For this reason, you should always get in touch with a reputed insurance advisor for getting the correct suggestions while buying insurance for your car.
Common Car Insurance Questions
What Factors Decide the Premium for Car Insurance?
The price of the car plays a major role in deciding the premium of your car insurance policy. When you have an expensive vehicle, you need to pay more money to get suitable coverage. The age of the car also determines how much premium will be charged for the cover. Older vehicles depreciate in market value and they will usually need less money to get coverage. The previous track record of the vehicle also matters in this situation. In this way, you can get the best car insurance in Dubai at very attractive rates when you compare the different options available with leading service providers in the market.
What is no Claim Bonus?
If you have not made any claims for your car insurance policy, then you become eligible to get the benefit of ‘No Claim Bonus’. In this situation, your entire tenure of insurance is considered as no claim year and hence you are rewarded for this the next time when you want to go for car insurance policy renewal. Most of the times, the insurance company offers some discount on the policy premium. If you can maintain this track record for a few years, you will be eligible to get good discounts on your car insurance policy. The no claim bonus is valid even when you switch to a different insurance provider.
How to Save Money on Car Insurance?
To begin with, you need to understand that choosing third-party coverage will give you the basic mandatory coverage at very affordable rates. The only drawback of this coverage is that your own vehicle will not get any compensation for the damages. If you do not want to go for such options, you can choose the comprehensive plans wisely and add only the required additional features. Also, make sure that you avoid claims for small damages as this will increase the premium for further renewals. You should also compare the existing plans in the market and search for attractive options so that you can choose the best car insurance in Dubai at very low rates.
What Coverage is Offered by Comprehensive Insurance Plan?
The comprehensive coverage offers the best protection for your car as it covers both third-party liability and any damages to your own vehicle. Additionally, in the event of damage to your car due to natural disasters or fire accident, you can get adequate coverage from the insurance company. In the same manner, you can even get compensation when your car is stolen or when a complete loss of asset happens due to other reasons. You can even add various add-on features to this plan and provide additional security depending on your requirements.
Car Insurance Misconceptions
Misconception: Third-Party Coverage is Cheap and The Best
While it is true that third party coverage is the cheapest option available in the market, it is certainly not the best option available for your expensive or new vehicle. Remember that in this plan, any damage that happens to your own vehicle is not covered and only third-party liabilities are covered by the company. In simple terms, when your vehicle is involved in an accident, you will have to bear all the expenses for its repair incurred due to damage. In this way, it is not a good option when your car still has a lot of market value.
Third-party coverage is only suited when your car has become very old and when you do not use it often for commuting. On the other hand, you can go for comprehensive insurance plans to get complete protection.
Misconception: Driver’s Track Record Does Not Affect Insurance Premium
This is false as the age of the driver affects the premium. When the age of the driver is more than 30 years, the premium will naturally go high for the car insurance policy. In the same manner, when the track record of the driver is not good and the person was earlier involved in an accident, the risk factor increases and hence the insurance company charge a higher premium.
Misconception: Coverage Given Depends On The Purchase Value of The Car
This is entirely false and your car begins to lose value right from the first day it is out of the showroom. Going by this logic, your car may lose half of its value by the time it completes five years. Whenever insurance companies value your car, they will consider this standard depreciation factor and provide only that much cover as it is equivalent to the market value of your car. You can take a look at the best car insurance Dubai from different service providers and understand this concept. Most of them will value your car similarly based on the depreciation factor.
Misconception: Buying Car Insurance is Optional
This is a complete myth and buying car insurance is mandatory as per law. If you are found driving without insurance, you can be fined by the police. It is not about if you can afford to pay for your expenses in the event of any damage to the vehicle. It is about public safety and when some damage happens to the third party out of your negligence, there will be no authority to take money from your side if you are also badly injured or dead in that situation. For this reason, the authorities impose that buying insurance is mandatory for every vehicle running on the roads so that the interest of every person can be safeguarded in the future.
Misconception: It is Very Difficult to Make Claims After Damage
There is no truth in this myth as it is very easy to make claims whenever something goes wrong with your vehicle. All you need to do is to file a complaint with the local police about the situation and they will conduct their investigation and provide the report. You need to simultaneously inform the insurance company about the incident. Later submit the report given by the police with relevant documents about the policy and other details about the incident. The claim will be processed and you can get compensation from the insurance company.
These are some of the most frequently asked questions about car insurance plans. If you find any difficulty in selecting the best car insurance in Dubai for your vehicle, you can even compare the different plans offered by various insurance companies with the help of a reputed insurance web aggregator.