You recently purchased a car, and were very happy with the new buy until your son got into an accident involving the new car. While thankfully your son didn’t get a scratch, the same can’t be said about your car, which got quite a few dents and scratches. Thank god for your car insurance policy, which will help you pay for these damages. Now the next obvious step is to make a claim with your car insurance provider for these damages, right? Your well-meaning neighbour doesn’t seem to think so. He is of the opinion that there is no point in making small car insurance claims, especially since you can get the minor damages fixed from your own pocket. “But what is the use of a car insurance policy then?” you reason with him. He tells you there are a few situations he can think of for not doing so. Let’s take a look at some instances when you might choose to not make a car insurance claim
There are two types of car insurance policies available in the market: comprehensive car insurance and third-party car insurance. While third-party car insurance covers damages to third party property/vehicles and bodily injuries or death to the third party, comprehensive car insurance covers damages to the policyholder’s vehicles and offers third-party coverage. If you only have a third-party insurance cover, and your car has been damaged, you cannot file a claim as it will be rejected. To ensure complete coverage, you should opt for a comprehensive insurance policy.
Believe it not, the easiest way to get discounts from your car insurance provider on car insurance policy renewal is through No Claim Bonus. You can get discounts of 20 per cent and above if you do no make claims over a period of one year and more. These discounts keep increasing with every claim-free year, and can go up to 50%. But even if you make one small claim, you stand to lose all the benefits you have accrued over the years. So, as long as you exhibit good behavior you keep earning rewards from your car insurance provider, but you might end up losing them all with one mistake. A good way to determine whether you should retain the No Claim Bonus is to check whether the discount earned as a result of NCB would be as much as or more than the claim amount.
Let’s consider an example. The deductible for your insurance policy is ₹ 3000 and the NCB discount you have accrued over the years amounts to ₹ 5000. You want to make a claim of ₹ 7000, of which you will have to pay ₹ 3000 yourself. In this case, you will have to pay ₹ 3000 plus lose the NCB discount of ₹ 5000, which amounts to ₹8000. In this case, it might make sense to get the car fixed at your own cost and retain the NCB discount.
But there’s a way you can protect your NCB even after making a claim: by purchasing the NCB Secure add-on cover with your comprehensive car insurance policy. This add-on cover allows you to make one claim during the policy period while keeping your NCB secure.
So your car was involved in an accident, but you find out that the fault was not your son’s but the third party’s. What do you do in such a case? You file a third party insurance claim. Though this process if more cumbersome than filing a claim with your car insurance provider, you at least won’t lose your NCB benefits. To ensure the claim is processed smoothly, you will have to file a First Information Report (FIR) with the police and prove that the fault was not yours.
There are no written rules as to when you should or should not make a claim. Before making a claim, always assess the situation to see whether you would be at an advantage.
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