When Is It That You Should Raise A Car Insurance Claim?

When Is It That You Should Raise A Car Insurance Claim?

Car insurance
Car insurance is necessary to comply with the law. The Motor Vehicles Act of 1988 makes it mandatory to purchase a car insurance along with registration and PUC requirements. The benefits of buying a car insurance are not limited to avoiding fines, but also availing financial coverage for times when accidents or mishaps occur. 

Your car insurance policy can help you claim the cost of damages. This pay-out depends on the type of policy you purchase. For instance, a third-party policy will compensate only for damages to third-party property and injuries but will not cover the damages to your car. Hence, a comprehensive plan is a better alternative that not only covers third-party liabilities, but also own damages. 


If you happen to meet with an accident, whether to make a claim or not can often be perplexing choice. There are no set rules, however a few calculations need to be made, especially in the case of minor repairs. The reason for such confusion is that future premium rates are affected adversely when you make repeated claims. You need to assess that based on the quantum of the loss, deductible of the policy and its consequent impact on premium. Here are the three factors that you must consider – 


#1 Deductibles


Deductibles are a part of all car insurance policies. The regulator, Insurance Regulatory and Development Authority of India (IRDAI), has introduced compulsory deductibles required for all car insurance claims. Here, you need to pay a specified amount of expense before the insurance coverage kicks in. The insurer then pays the balance amount of claim after reducing the deductible paid by you, the policyholder. So, if your repair costs are equal to less than such deductible as specified in your policy terms, it makes no sense to make an insurance claim.


#2 No-Claim Bonus (NCB)


Not all policy tenures witness an insurance claim. For that reason, the insurance companies offer a no-claim bonus or NCB at the time of renewal premium. The NCB concession is calculated as a percentage of own-damage cover for all comprehensive policies. It starts at 20% and goes all the way up to 50% for every consecutive claim-free year. These NCB benefits thereby lower a significant amount of premium at the time of car insurance renewal. So, if you wish to avail these NCB benefits, you need to avoid making a claim thus making it crucial consideration whether to raise a claim or not.


#3 Third-party claim from another person


There are instances when your car is damaged due to the fault of a third person. At such times, you have the option to either raise car insurance claim from your own policy or using the policy of such person at fault. With the help a policy of such other person, you can make a claim for damages. This way, you not only save on the deductibles involved in the claim, but also preserve your no-claim benefits. 


The bottom line is you need to keep in mind when raising a claim for repairs. Not all repairs need to go through your insurance company as avoiding minor repairs can help your save on premiums in the long run. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale. 


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