In this article, we will explore some common myths and misconceptions surrounding car insurance. These misconceptions can often lead to expensive decisions, so it’s important to understand the truth behind them. We will debunk these myths while keeping in mind that HTML tags need to be preserved. So, let’s get started.
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1. Costly Insurance policy package means higher benefits
The assumption that expensive insurance policies provide higher benefits is not true. While people may believe that costly insurance policies will offer greater coverage, this is often a misconception. Each insurance company sets its own prices based on factors such as the car being insured and the driver’s history. The coverage provided by different companies can vary significantly, even for the same car. It’s important to shop around and find the right insurance company for your needs. Additionally, it’s worth noting that add-on services can increase your premium, but there’s no guarantee you’ll actually use them.
2. All car insurance policies prices are the same
This is incorrect as prices for car insurance policies can vary between different companies. Each insurance company offers unique features, add-on services, and special benefits to policyholders. These differences in offerings result in varying prices. It’s important to compare prices and offerings from different insurance providers before making a decision.
3. Collision coverage is included in the insurance
There is a misconception that collision coverage is automatically included in car insurance. However, collision coverage is an add-on service that must be purchased separately. This coverage protects against damages to your vehicle caused by a collision, whether partially or entirely. Without this add-on service, default coverage may be provided only if there is no 100% fault on the part of the driver. It’s essential to understand whether you have collision coverage or need to purchase it separately.
4. No-fault insurance means it’s not the policyholder’s fault
In an accident, fault can be attributed to one or both parties involved. No-fault insurance refers to the reimbursement of damages, regardless of fault determination. If the policyholder is responsible for the accident, their insurance prices may increase. Conversely, if the policyholder is not at fault, their insurance prices will not increase. It’s important to understand the implications of fault in insurance claims.
5. Red color cars have more insurance premium
The color of a car has no impact on insurance premiums. Insurance premiums are determined based on factors such as vehicle claim history, repair costs, and car type. Premiums may be higher for high-end cars that require more maintenance, regardless of their color.
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6. Used Cars have less insurance premium
According to UAE RTA Law, car insurance is mandatory regardless of whether the car is new or used. The premium for car insurance depends on the add-on services selected and the coverage provided. Generally, basic third-party insurance is purchased for used cars or old second-hand cars to reduce the premium burden, but this does not mean that used cars have lower premiums in general.
7. Switching Insurers will make you lose your discounts
Switching insurance companies does not necessarily mean losing your discounts. While there may be some discounts offered for staying with the same company, discounts can also be provided when switching to a new insurance company. The availability and amount of discounts may vary, but it is possible to switch insurers without losing your discounts.
8. If your car is driven by others and meets with accidents, it will not show on your insurance
This is a misconception as car insurance is tied to the car itself, not just the driver. When you allow others to drive your car, your insurance coverage extends to them as well. If the car is involved in an accident while being driven by someone else, it will still affect your insurance and be reflected in your claims history.
9. Old Cars do not need insurance
Old cars are still required to have car insurance. Whether a car is old or new, insurance is mandatory for all vehicles on the road. While insurance companies may consider the age of the car when determining premiums, insurance is essential regardless of the car’s age.
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10. If you transfer car insurance, you will lose your no-claim discount
Transferring car insurance does not result in the loss of your no-claim discount. The no-claim discount is a reward offered by insurance companies for not making any claims. This discount can continue with the new insurance company if you transfer your insurance within a certain time frame before the policy expires. The no-claim bonus can be transferred along with the insurance.
In conclusion, it’s important to be aware of these common car insurance myths and misconceptions. By understanding the truth behind them, you can make informed decisions when purchasing or switching car insurance policies. Remember to always compare prices and offerings from different insurance companies to find the right coverage for your needs.