A car insurance in simple terms is an agreement between you and the insurer. You pay a certain premium on a yearly or half yearly basis. And in return, the insurer offers you financial protection against several scenarios and risks that one might come across on a regular basis. However, since it is an insurance product at the end of the day, there are chances that policyholders might face some issues while claiming their policies.
Here is a list of some of the most common hurdles or issues that one might face during claiming car insurance.
- Lack of Documentation
Usually, it is not a cakewalk to claim a policy and get payments from your insurer. There is no doubt that things have improved a lot in the last few years but it is still far from being perfect. From a policy holder point of view, it wouldn’t be completely wrong to think that an insurer would look for issues to reject the claims. Thus, ensure that you have all the required documents and furnish them within the time frame mentioned by your insurer to avoid claim rejections.
- Claim Timelines
This is kind of a gray area when it comes to car insurance policies. All the policies have a specified term duration and a car insurance policy is no different. Since there is no fixed amount of time for claims it can be a double edged sword. There are several instances where insurers have rejected claims citing the timing of the claims. Thus, it is important to claim your policy at the earliest if you wish to do or at least at regular intervals.
A deductible is an amount that you agree to pay for claims. However, if you do not specify the same, insurers usually will use the lowest deductible possible. On the surface, it might seem a good thing for you but in reality, it is not. When deductibles are low, it increases the insurance premium. Thus, one needs to be careful with deductible amount during policy purchase.
There are quite a few instances where a policyholder is not aware of the policy coverage. This can lead to a lot of frustration and even claim rejection. Thus, going through the policy documents and being aware of the policy terms and conditions can help you avoid such situations.
In the case of an accident, make it a habit to file an FIR. Though a lot of the policies do not require it as a mandatory document, it can come in handy. It will protect you against false claims by the other party such as bodily damage or severe damage to their vehicles. And should your insurer ask for an FIR, you would have a copy.
No Claim Bonus – Overview
A No Claim Bonus is a perk that is available for policy holders if they do not claim their insurance in the previous term. You can think of it as a mechanism by which the insurers are thanking you for keeping the roads a little bit safer by avoiding accidents, incidents and maintaining your car well. The no claims bonus is applicable to the own damage component of the policy premium and not the entire premium.
Most of the insurers offer a minimum of 20% discount for the first year. For an example, if you bought a car insurance policy in the year 2016 and did not claim it while renewing your policy in 2017, you can avail a 20% discount on the own damage component. The best part about the discount is that it is cumulative. And most insurers will let you carry forward the same up to 5 years or 50%.
To make things even more interesting, a policy holder is the owner of an NCB. This means that even if you change cars or insurers, you can carry forward/ transfer the same. Thus, the inclusion of NCB can help you cut down on your car insurance premium by a healthy amount.
Reasons to Claim Car Insurance
The whole point of a person buying an insurance is to use it at the time of need. If a policy holder meets with an accident and it results in some considerable damage to the car, a claim is on the cards. Or if there is some burglary or theft of your car, a claim is the only solution. A claim would not only pay for most of the damage repairs but also keep you away from an unwanted financial burden. Thus, buying a car insurance policy is the smartest investment that you can make when it comes to cars.