Understanding the claims process in car insurance

Summary:

Hassle-free claim settlement is the ultimate target of any insurance holder, be it general, health, or motor. However, there is a particular procedure that both the insured and the insurer needs to follow to complete it.

Introduction

As per the mandates of the Motor Vehicles Act of 1988, it is mandatory for every single vehicle plying on the roads of India to maintain a valid car insurance plan. This is essential as car insurance acts as a protective shield in the case of any accidents involving your vehicle.

There are two types of car insurance:

1. Third-party insurance: Third-party car insurance is the basic insurance coverage sufficient to meet legal standards. It covers third-party losses and damages during any accidental circumstances.
2. Comprehensive insurance: This is a more elaborate cover, offering you the scope of both the third-party and self-damage cover together.

Instances of car insurance claim settlements

Some of the most highlighting aspects where you can file for car insurance claim settlement include:

1. Accidents:
2. When your vehicle causes any loss, injury, or damage to the third-party
3. The self-damage claim is applicable when only your vehicle faces any damage
4. Both the self-damage as well as a third-party claim when both parties face losses or damages.
5. Car theft:
6. When a concerned vehicle bearing a comprehensive plan gets stolen, then this claim settlement issue arises.

Types of car insurance claims

Depending on the circumstances and the type of plan chosen, there are two basic types of car insurance claims:

1. Cashless claims: As the name suggests, in the case of a comprehensive plan, you get this facility, when your vehicle faces any damage. Under such circumstances, you can visit any listed network garage or workshop for repairs and replacement and mail the bills to your respective insurer. You just need to pay the voluntary deductible or the co-liability share.
2. Reimbursement claims: If you repair your vehicle at any garage or workshop that is not listed by your insurance company, you need to settle the bills and then send them to your insurer along with all the other relevant documents. The insurer will verify the claim and disburse the approved claim within 8-10 business days.

A claim settlement procedure in car insurance:

If your car is covered by comprehensive coverage, you can raise claims for any loss or damage incurred. Under such circumstances, you need to follow certain steps for claim settlement:

Claims during accidents:

1. Under any accidental circumstance, you must inform the concerned insurer about the development immediately. You can reach their toll-free number and mention the relevant details like your vehicle’s registration number, accident details, etc.
2. After intimation, you can shift your car to the nearest network garage or workshop for cashless claim settlement. However, if it seems impossible in that situation, you can move to any garage, for that matter, and later claim reimbursement from your insurer.
3. If there is any third-party damage or injury, then a police FIR is mandatory. This is applicable for both passengers as well as goods vehicles.
4. An inspector from the concerned insurance company will pay a visit to assess the extent of the damage and provide you with the approval for beginning the repair.
5. You need to fill out the claim form along with the insurance plan copy, RC, and DL of the driver who was driving during the accident, along with all the other relevant documents to the workshop or the garage.
6. Based on the motor accident tribunal rulings, the concerned insurer settles any third-party claim.
7. On completion of all the repairs and replacements, the insurer settles all the relevant bills with the workshop. Depending on the terms of the chosen plan, you may need to pay a certain part of the bill amount.

Claims during car theft

1. As soon as you discover the theft, inform your respective insurer immediately.
2. You must file an FIR at the nearest police station.
3. You can then this up by asking for a claim settlement with the concerned insurance company by submitting a copy of your vehicle insurance, RC book, FIR copy, DL copy, and a copy of the intimation that you have sent to your respective RTO.
4. The insurer is liable to settle your claim after the police department issues a “non-traceable” report of the concerned vehicle after 3 months of the loss.
5. Under such circumstances, you require to transfer the RC in the name of your insurance provider, along with a subrogation letter, that transfers all rights of the concerned vehicle in the name of the insurer.
6. On completion of all these procedures, the IDV (insured declared value) of the vehicle is offered for claim settlement.

Important factors to consider during claim settlement:

While making an insurance claim settlement, you need to keep certain important factors in mind:

1. Excess:

In every motor insurance plan, there remains a component of compulsory excess, representing that part of the claim that you need to pay out of your own pocket. Bearing this excess amount is mandatory for every claim settlement. Apart from this, there is voluntary excess as well, where you willingly agree with your insurer to bear a fixed percentage of the claim. Voluntary excess leads to earning you premium discounts.

2. Exclusions:

Every car plan bears certain exclusions. Any claim raised in such a category will automatically lead to rejection. Therefore, you must be aware of these concepts before purchasing the plan and raising a claim.

3. Depreciation:

In case your vehicle undergoes repair, depreciation will be calculated on the concerned components. Therefore, the insurer will settle the bills after deducting the depreciation amount. You have to settle this unsettled amount.

4. Preferred garage/workshop:

You can exclusively claim for cashless claim settlement only if your vehicle undergoes repair in any listed/preferred garage or workshop. You can easily reach out to the customer service cell of your insurance provider.

5. Loss of NCB:

NCB implies the special bonus offered by an insurance company for one claim-free year. This gets accumulated every year and leads to a premium discount when you renew your plan. However, if you raise a claim, NCB gets back to square one. So, it is wise to avoid raising claims for smaller damages to keep the NCB intact.

6. List of documents:

You need to submit a certain set of documents along with the claim form for a smooth claim settlement, including the DL of the concerned driver, the FIR copy, the insurance copy, the RC copy, the PUC certificate, etc.

7. Using riders:

Riders are additionally bought with the basic plan to enhance the coverage scope. You must be careful enough while choosing the type of rider, as all riders are not equally suitable for every user. Depending on your preference and requirement, you have to make your choice.

8. Immediate intimation:

You must inform the insurer and the police immediately after the claim situation arises. You can do it online with your policy details as well.

However, for third party car insurance, you need to follow the exact procedure of police investigation else the case might not be admitted in the court of law.

How do car insurance plans get rejected?

Your claim may get rejected under the following circumstances:

1. If the fault or negligence is yours, or
2. There is no proof of accident, or
3. Providing fraudulent details during car/insurance purchase, or
4. Are you following an incorrect claim process, or
5. You file a claim for any excluded component, or
6. Is there a delayed intimation/claim raise, or
7. The care insurance plan has lapsed at the time of claim.

Conclusion

This comprehensive article highlights the fact that no self-damage claim can be raised with third party car insurance. You need to keep these facts in mind while raising a claim.

Disclaimer: The above information is for illustrative purposes only. For further details, please refer to the policy wordings and prospectus before raising the claim.