A car insurance policy is a mandatory requirement as per the rules of the Motor Vehicles Act, 1988. Thus, if you have a car, you should have a valid car insurance policy on it. A car insurance policy can come in two variants. One is the mandatory third-party liability policy which covers any financial liability that you face if any individual is physically hurt or killed by the car or if the car damages any individual’s property. This cover is mandatory as per the Motor Vehicles Act, 1988. The other type of car insurance policy is a comprehensive car insurance policy. This policy covers third party liabilities as well as the damages suffered by the car itself (called own damage cover). The coverage under your car insurance policy would, therefore, depend on the type of policy that you buy. Whatever type of policy that you buy, do you know how to claim car insurance?
A car insurance claim is said to occur when you face a contingency which is covered under your car insurance policy. In that case, you can make a claim on your car insurance provider and the insurance company would compensate for the financial loss that you suffer.
Car insurance claims can be of three types. They are as follows –
The car insurance claim process would depend on the type of claim that you suffer. So, let’s understand how to claim car insurance for different instances of claims –
A third party claim is said to occur in any of the following instances –
In any of the above-mentioned instances of claim, the claim process would be as follows –
If the car suffers any damage, it is called an own damage claim. Own damage claim can be settled either on a cashless basis or on a reimbursement basis. The claim process for both these types of claim settlements is as follows –
Cashless claim settlement happens when you get the car repaired at the networked garage of the insurance company. In that case, the insurance company settles your car insurance claim directly with the garage and you don’t have to bear the cost of repairs yourself. The process for availing cashless claims is as follows –
If you get your car repaired at a non-networked garage, the claim would be settled on a reimbursement basis. You would have to bear the repair costs initially and then get the costs reimbursed from the insurance company after the repairs have been done by submitting the repair bills. The process is as follows –
In case your car is stolen, it is said to be a theft claim. The claim process for such a claim would be as follows –
In case of a claim in your car insurance policy, a list of documents would have to be submitted to the insurance company to get the claim settled. These documents are as follows –
A surveyor is an individual whose primary task is to assess the damages suffered by the car in case of own damage claims. The surveyor makes sure that the insurance company pays for the actual financial loss suffered by the policyholder in case of damages to the car. The insurance company depends on the surveyor’s report to ensure that the claim is authentic and also to determine the extent of the claim. The surveyor acts in the interests of both the insurance company and the policyholder. Moreover, in case of a total loss of the car when the car is sold for scrap, the surveyor assesses a reasonable scrap value which can be deducted from the IDV of the car insurance policy before the company settles the claim. Thus, the surveyor’s role is integral in claim settlements in case of own damage claims.
Though insurance companies try and settle all car insurance claims which are made on them, there are some cases in which your claim can be rejected. These instances include the following –
If you make a claim for a damage which is specifically excluded from the car insurance policy, the claim would be rejected. For instance, accidents suffered when you are driving without a valid driving license are not covered under car insurance plans. So, in case of a claim, if the company finds out that the driver did not have a valid driving license, the claim would be rejected. Similarly, if you face any claim when driving under the influence of alcohol or drugs or when committing an illegal act, the claim would be rejected by the insurance company.
A car insurance policy comes with a particular coverage duration. As the duration comes to an end, the policy is supposed to be renewed for continued coverage. However, if the policy is not renewed, it lapses. When the policy lapses, coverage stops. If subsequently, a claim is made in a policy which is in a lapsed state, the claim would be rejected.
You are supposed to follow the above-mentioned claim process to get your car insurance claims settled. If the claim process is not properly followed, the claim might be rejected.
If you are unable to submit the required documents for a claim, the claim might be rejected by the insurance company.
When you buy a second-hand car, the car insurance policy should be transferred to your name so that you can avail coverage. However, if you have not transferred the car insurance policy in your name and you face a claim when driving the vehicle, the subsequent claim would not be paid.
If you don’t want your car insurance claims to be rejected, there are some precautions which you can take. These precautions include the following –
Your car insurance policy proves to be a blessing when you face a financial loss due to any accident. Know the claim process of your car insurance plan so that you know how to make use of the policy when needed.
A compulsory deductible is the part of the claim which is not paid by the insurance company. You are required to pay the deductible limit yourself while the insurance company would pay the rest of the claim amount.
No, the insurance company does not pay the repair costs fully. A compulsory deductible is deducted from the claim amount. Moreover, the depreciation suffered by the car’s parts would also be reduced from the claim amount and the remaining amount would be paid as claim. However, if you buy a zero depreciation add-on, the depreciation cost is not deducted from the claim amount. In that case, the company pays a higher claim after deducting only the compulsory deductible.
If the car is so badly damaged that the repair costs would exceed 75% or 80% of the Insured Declared Value of the car insurance policy, such a claim is called a total constructive loss. In such cases, the insurance company pays the IDV of the car insurance policy after deducting the scrap value for which the car can be sold at a scrapyard.
Theft due to negligence of the car owner is not covered under car insurance plans. That is why insurance companies need you to submit both sets of car keys to ensure that you did not leave one set of keys hanging in the car thereby resulting in theft.
Car Insurance Companies