It is an open secret that buying a good car insurance policy will provide a financial backup in case of damage. However, there are some other insurance secrets that the policyholder may not always know about, that may help reduce the cost of your policy. Let’s dive straight into the top 7 car insurance secrets that you may not know.
The make and model matters in car insurance
The model of your car matters the most while determining the cost of your car insurance policy. This is because insuring a high-end car is a costly affair as compared to insuring a normal one.
In essence, repairing damages on a high-end car like Mercedes requires more money than repairing damages to a Honda. Even the manufacturing year of the car matters as it determines the current market value of the car parts and the depreciation it has suffered over the years.
You can get a discount by paying for minor claims
It is not always a good idea to make a claim against car insurance. It can disrupt your No Claim Bonus cycle. This is a discount you get for not raising a claim during the entire policy period, and is applied at the time of policy renewal. When you raise a claim for minor damages it can reset the NCB to zero and you will have to pay a higher cost for insuring your car.
Your claim history has an effect on car insurance premiums
Raising a lot of claims would directly mean that you are not a safe driver and you keep causing damages on a regular basis. This could increase the premium as the insurance company considers you a high-risk policyholder.
The opposite can happen if you drive safely and raise no claims. Your No-Claims Bonus accumulates for every claim-free year, up to a maximum of 50% discount. This can actually be transferred between insurers should you choose to switch once your policy is up. However, failure to renew your policy one way or another with 90 days can lead to you losing the built-up discount, so always be aware of that.
A claim for damage when you were careless about the car can lead to claim rejection
An insurance company expects you to first take proper care of your car and if in spite of that damage occurs then insurance will help you. But if you are careless about handling the car then your insurance company will not have your back. Because then the claim would be completely avoidable.
There are 2 types of car insurance claims
You can raise one of two types of claims in case of an unfortunate event. Two types of claims are cashless and reimbursement claims. These types depend upon where you get the damaged car repaired. If you get it repaired in a network garage, you can avail of a cashless claim. If you get the car repaired in a non-network garage then you first need to pay for the repairs and then get them reimbursed from the insurance company.
A modified model of a car attracts more insurance premiums
Modifying your car can increase its aesthetic value or the technological aspect. But this can increase the cost of insurance as well. Your comprehensive policy will only cover accessories that are provided by the car manufacturer and not the ones that you buy to modify the car.
Getting a car repaired before informing the insurance company can lead to claim rejection
When you buy car insurance, you can rest assured that your insurance company will help you financially if your car gets damaged. This is true only if you are transparent and truthful with the insurer. When you fail to inform them about the damage, you lose the trust factor.
Never get the car repaired before informing the insurance company if you intend to raise a reimbursement claim. Your insurer will send a surveyor to understand how much damage your car has suffered and then you can get it repaired. Then comes the reimbursement claim.
The Bottom Line
Car insurance provides a solid financial backup when you face an unfortunate event related to your car. Be it compensating the third party or repairing your damaged vehicle, your insurance company will bear these costs as per the type of policy you purchase. As a policyholder, you need to do a bit of research and get to know how car insurance works. Once you are clear about this, you will know that insurance companies like Mimbs & Associates Insurance are here to help you out of a tight financial situation rather than leaving you to face the crisis.