Many people consider car insurance with all the terms and conditions is a complicated matter. Even the determination of premiums still confuses many customers. For ordinary people, special explanations are needed to avoid misunderstanding some of the principles of car insurance. Therefore, in this article, it will help you recognize the myths about car insurance that are often circulated.
1. Color affects the premium rate
People tend to think that vehicles with bold colors like red or yellow are charged with higher insurance premiums compared to neutral colors like black and white.
The fact is, whatever the color of your vehicle, graded or patterned, does not affect the premium you pay every month at all.
2. Old cars may not be the target of theft.
In fact: the motives for vehicle theft are different, some steal to sell back the stolen goods, including the spare parts of the vehicle, others steal because they have to. In addition, theft due to other personal motives cannot be ruled out. Therefore the age of the car does not guarantee the safety of your car from theft or other crimes. In addition, older cars tend to be more easily stolen (because the system is still simple).
3. Full Coverage means that all costs you incur to repair car damage including renting a tow truck or a replacement car are borne by the insurance.
The fact is: additional costs such as tow trucks or replacement cars are generally borne by the customer unless there is a specific agreement with the insurance company that lists these points as a clause. Such clauses are usually followed by provisions for customers to pay additional fees as needed.
4. If Total Loss Only (TLO) insurance is protection against accidental damage, Comprehensive insurance covers all kinds of damage that occurs to your car.
The fact is: Comprehensive insurance does cover damage caused by accidents and damage caused by vandalism, floods, fires, earthquakes, landslides, and other natural disasters. While Total Loss Only only in accidents or events that cause your car to be damaged more than 75% of the condition of your car or stolen.
5. The same insurance premium for the same type of car and year of manufacture.
The fact is: car insurance premiums are determined individually, not only from the characteristics of your car but also your characteristics as a driver. If you are a lower risk customer, then your premium will be lower too.
6. New car insurance premiums are definitely more expensive than old car premiums.
In fact: the determinants of premium related to car characteristics are not only the year of the manufacturer, but also the engine, brand, and type of car.
7. Types of sports cars or off-road vehicles are more often affected by speeding tickets so that the premiums are greater.
The fact is: if at point 6 the engine factor and type of car are stated to have contributed to the high and low of the premium, for this case the insurance company needs to consider the driving factor. If your car is a sports car, but your age, gender, occupation, and driving history show that you are a low-risk customer, then the factor of the type of car as a premium determinant can be minimized.
8. If the car has an accident or something is stolen when the car is borrowed, insurance will provide compensation for damage/theft.
The fact is: if the borrower's name is not included in your insurance policy, then you are responsible for the losses incurred unless there is a special clause in your policy.
9. Your credit background has nothing to do with insurance premiums.
The fact is: if you have a good credit background, insurance companies will tend to classify you into a group of low-risk customers, which consequently can reduce your premiums.
10. The insurance company can cancel the policy at any time.
The fact is: if the insurance company has no reason to cancel or revoke your policy, then this cancellation should not be done. The things that can cause cancellations are if you neglect to pay your premium for months or if you commit insurance fraud.
To avoid the trap of myths as above, there are at least two things you can do, namely:
- Read carefully the terms and conditions and clauses listed in your insurance policy.
- Contact your insurance agent & ask for an explanation from them if you are in doubt about certain points in your policy.
To get information about the cheapest and most trusted car insurance in Indonesia and the price of car insurance premiums, please check on our comparison site.