When to avoid car insurance claims and why?

Car Insurance

The occurrence of accidents is highly unpredictable; it can happen to anyone, anywhere and at any point in time. Having said that, the first thing that would strike one’s mind during the occurrence of any minor or major accident is informing the insurance company and claim for the loss. However, this can’t always be the wise thing to do.

Surprised right? Well, the fact is there can be certain situations wherein you might be under loss for claiming the insurance. Scroll down this article to know more about when one should avoid car insurance claims.

Third-party can pay for your repair cost

There can be situations wherein the accident has been caused because of the third-party. In such cases, you can opt for a third-party insurance claim. For the claim process, you need to file an FIR and prove that the accident was not caused because of you and show the repair payment receipts. This way, the third-party expenses could be claimed, and you would prevent yourself from losing any NCB benefits that you have accumulated over the period of time.

Also Read: Things To Consider While Purchasing Health Insurance During A Pandemic

There are certain situations wherein the third-party may agree to settle the damage amount by paying from his or her pocket. This could be another stress-free situation wherein you need not worry on claiming for anything and in return also save on your NCB benefits.

Your repair cost is lower than NCB

No Claim Bonus benefits are given to the insured if they haven’t made any claims in the previous year. The bonus benefit percentage ranges from 20% to 50% (increases each year and 50% capped for 5 consecutive claim-free years).

The catch here is one can lose this benefit if any claim is made; hence, it is suggested to prefer paying the cost from pocket rather than losing on the accumulated NCB over the years provided the repair cost is minimal compared to the NCB. If the repair cost is higher than the NCB, then it is preferable to choose claims than to pay from self-pocket under such a situation.

Higher Deductibles

There are two types of deductibles, voluntary (Rs. 2000 for > 1500 cc) and compulsory (fixed at Rs. 1000 for car engines < 1500 cc). If the vehicle repair cost is less than the deductible, then it is wise to not raise a claim as you will need to pay the compulsory deductible amount as per the policy term.

Minor Damage Case

If your car undergoes minor damages during an accident such as dents, break in the mirror, scratches on the surface or any other minor damage, then under such case, one should avoid making any claims. Such minor claims may indicate you as a risky driver owing to damages made while riding on busy roads. It can affect your claim history as well.

Also Read: How to claim from multiple health insurance companies?

Conclusion

The bottom line is each one of us buy an insurance plan to compensate for the losses or damages that we incur during any mishap. However, opting for the claim option for a car insurance policy may not always be an informed decision as you might end up incurring more loss than the damage cost. Hence, it is advisable to consider the above highlighted situations before making any instant claim decision, as it will be beneficial to save money and improve your claim record.

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