Myth 6: In case of a car crash, I will get a claim amount equivalent to the amount of a new car
This myth is also false. An insurance company pays a claim amount based on the actual cash value of your car at the time of the accident, not on its original purchase price or replacement cost. The actual cash value is calculated by subtracting depreciation from the market value of your car. Depreciation is the loss of value due to age, wear and tear, mileage, and other factors. Therefore, the older and more used your car is, the less it is worth and the less you will get from your claim.