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Having car insurance is an important step in protecting yourself from risks on the road. Unfortunately, there are still many misconceptions surrounding this product. Many people misunderstand how claims and premiums actually work. Let’s debunk the most common myths so you don’t end up choosing the wrong policy. In this article, we’ll explore 5 common myths about car insurance and reveal the facts so you can make wiser, more informed decisions.
A lack of understanding of insurance benefits and mechanisms can lead vehicle owners to:
Choose the wrong product
Pay premiums without maximizing their benefits
Feel disappointed when filing a claim
By understanding the real facts, you won’t just save money but you’ll also gain peace of mind while driving.
Let’s begin with the first myth that often misleads many car owners.
Many people believe that only new cars need insurance, while older cars don’t.
The facts: Older vehicles are still vulnerable to theft, accidents, and natural disasters. Losing a car that's more than five years old can still mean a significant financial loss.
Risks That Still Threaten Old Cars
Risk |
Potential Losses |
|---|---|
Vehicle theft |
Total loss without compensation |
Major accident damage |
High repair costs |
Flood damage |
Vehicle restoration costs can exceed the market value of the car. |
Now that we understand all vehicles need protection, let’s tackle another myth, one about premium pricing.
Many potential insurance customers think that the more expensive the premium they pay, the broader or better the protection.
The facts: Premiums are influenced by many factors, including vehicle value, usage risk, location, and optional policy add-ons. Expensive doesn’t always mean better coverage.
Factors Determining the Amount of Insurance Premiums
Factor |
Impact on Premiums |
|---|---|
Vehicle value |
The more expensive the vehicle is, the higher the premium |
Vehicle age |
Older vehicles tend to have lower TLO premiums |
Location of use |
Accident/disaster prone areas = higher premiums |
Policy coverage |
All Risk coverage is more expensive than TLO |
After discussing premiums, now it's time to debunk the myths about claiming all types of damage.
Some people think that all damage to the car, no matter how small, can be claimed through insurance.
The facts:The type of claim accepted depends on the type of policy you choose:
TLO Insurance covers total loss or severe damage (>75%).
All Risk Insurance covers almost all damages, but there still comes with terms and conditions.
Claim Coverage Based on Policy Type
Type of Damage |
TLO |
All Risk |
|---|---|---|
Total loss due to theft |
✅ |
✅ |
Minor damage (scratches, scratches) |
❌ |
✅ |
Serious damage due to accident |
✅ |
✅ |
Flood damage |
Add-ons |
Add-ons |
Disclaimer: Flood risk protection is not automatically included in the basic TLO or All Risk policies. You must purchase additional coverage to get this protection.
Also read: Differences between Comprehensive Car Insurance (All Risk) vs TLO
Now let's dispel the myth about whether insurance will still pay even if you yourself caused the accident.
Some vehicle owners hesitate to file a claim because they feel guilty about causing the accident and are afraid their claim will be rejected.
The facts: Most insurance policies will still cover your claim even if you were at fault, as long as the incident:
Does not involve breaking the law (for example, drunk driving)
Does not violate the terms of the policy (such as using the vehicle for illegal racing)
Driving under the influence of alcohol or drugs
Not having a valid driver’s license
Intentionally damaging your vehicle to file a claim
Tips: Always read the exclusions in the policy so you know what situations could cause a claim to be rejected.
After this, we will discuss the importance of having insurance even if you feel like you are driving very carefully.
Many believe that if you drive carefully, you don’t need insurance.
The facts: Road risks aren’t always caused by your own mistakes. Other drivers, poor road conditions, and extreme weather can still put your vehicle at risk.
Uncontrollable External Factors
Factor |
Risk |
|---|---|
Bad weather (floods, heavy rain) |
Car may skid or get submerged |
Negligence of other drivers |
Side or rear collisions |
Damaged or potholed roads |
Damage to tires, rims, suspension |
Crime (theft) |
Vehicle stolen from public parking areas |
Disclaimer: The risks and examples listed above are for illustrative purposes only. Actual coverage may vary depending on the insurance policy, selected add-ons, and terms and conditions applied by each provider.
Understanding the facts about car insurance is essential to making informed vehicle protection decisions. By debunking five common myths, you are now better prepared to choose the insurance product that truly suits your needs.
Remember, car insurance is not just a formality, but real protection against major financial risks.
Don't let myths stop you from getting maximum protection for your vehicle. For the best protection options and easy claims process, trust Oona Car Insurance.
Get complete peace of mind while driving with a policy designed to suit your needs!
