Your car is an asset and you need to safeguard it in every way possible. Having a personal means of mobility do come with a sense of independence and mental stability. However, often due to unforeseen circumstances, your much-loved car might face damages for which you might not be prepared. Damages caused to your car might arise out of situations or events like road accidents, natural or human-made calamities like cyclones, earthquakes, fire, explosions or even due to cases like a car transit.

Talking about the worst situations you might face is that of a total loss of your vehicle due to events like theft or vandalism. However, apart from your car, the car owner or other third parties like passengers, pedestrians, or co-drivers might even receive damages or losses. Whatever be the damages caused, you can claim for them from your car insurance company if you are an active policyholder. In short, you need to have a car insurance policy which would protect you against all such damages.

After signing that contract with your car insurance company, you legally bind yourself with the terms and conditions covered in the policy. Your insurance company is bound to cover and protect you against unavoidable circumstances or unfortunate events. According to 2016 NDTV statistics, about 1214 road crashes occur every day and about 377 people die each day due to road accidents. Insuring yourself and your car would not only assure you with monetary support at emergency situations but would also provide you with mental security.

Types of Car Insurance Plan

Broadly speaking, there are two types of car insurance policy coverages offered by most car insurance companies. They include -

• Third-party cover: It covers all damages, injuries, disabilities, or death caused to a third party caused due to your car. Moreover, according to the Indian Motor Tariff Act 2002, it is legally mandatory to have a basic third-party car insurance policy so that you can take the liability in situations like a car accident that occurred as a result of your vehicle.

• Comprehensive OD cover: A comprehensive car insurance policy provides financial support against any damages caused to your vehicle and its parts such as a cracked headlight, a large dent that occurred to the vehicle, deployed airbags, a damaged engine and others along with third-party liabilities. A comprehensive car insurance policy would also have coverage for theft or vandalism in which the insurance company would reimburse you with the claim amount as per the conditions mentioned in your insurance policy.

Types of Car Insurance Claims

You can go for either of the following options while making a claim settlement with your car insurance company.

Cashless Claims

Making cashless claims means you are relieved from paying for the cost incurred on your for treating your injuries or repairing damages to your vehicle caused as a result of road accidents. If you file such a claim against your car insurance policy, you are required to take your vehicle for repairing its damages to a network garage. Your insurance company will directly deal with it and deliver you with a restored car. Simply pay for the deductibles associated with a cashless claim and leave the rest upon your insurance company to take care of the rest. You can learn more about car insurance deductibles on our website.

Reimbursement Claims

In this type, you need to pay for losses, damages or injuries from your pocket and then claim it from your insurance company by producing sufficient documents and evidence like original bills, payment receipts, supporting photographs, and the like. The insurance company will then subtract the deductible amount and reimburse the rest amount that you have paid for due to your repairs or treatments. You can also take your vehicle for repair at any garage of your preference.

Documents Required To Make a Car Insurance Claim

The following mandatory documents are required to claim for damages, losses or injuries caused to you or your car. Submit valid copies of them to your insurance company to enable a seamless validation and hence, make way for a smoother reimbursement procedure.

• A copy of the RC (Registration Certificate) of your car
• A copy of your car insurance policy
• Police or FIR report
• A copy of your driving licence
• Original bills and payment receipts

How to Make a Car Insurance Claim?

The moment you receive a car accident or a theft incident, raise a claim for the damages caused to your insurance company. After going through a proper inspection if your insurance company finds your claim to be genuine, it will cover all the damages caused to your car. If you have an OD car insurance policy, your insurance company will offer financial backup in such cases as well.

Here are specific steps which you must follow to claim for damage caused to yourself and your vehicle.

Step 1: Call your insurance company immediately and inform them about the damages caused to your car.

Step 2: In case your car gets damaged due to an accident or is stolen, inform the police regarding the matter and file an FIR. If required, do come up with the necessary witnesses present at the spot.

Step 3: Request for a surveyor from your car insurance company to inspect and examine the extent of the damages caused to your car or to trace it in case you lose it.

Step 4: Take your car to a garage authorised by your insurance company in case you want to make a cashless claim, otherwise to any garage of your preference for repairs. In the latter case, the amount of repairs will be reimbursed to you by the insurance company as per the terms of the insurance policy.

Claim Settlement Process For Different Types of Car Insurance Plans

1. Third Party/Liability Only Car Insurance Policy

In case any damage, injury, disability or death is caused to the third party due to a car crash caused by your vehicle, inform your car insurance company immediately. If, however, another car caused damages to your vehicle, inform about the details of the other car owner and his/her insurance policy coverage terms. In such cases, the amount of compensation is decided by a court of law

2. Comprehensive Car Insurance Policy

If you have a comprehensive car insurance policy and your car receives damage, inform your insurance company within one week from the incident. It will assign a surveyor to carry out a thorough examination of your car. The surveyor will then inform the insurance company about the intensity of the losses of damages, depending upon which your insurance company will accept or reject your claim. In the meantime, you can take your car to the garage for repairing purposes or ask the insurance company to do so. If it approves your claim request, your repairing charges will be compensated.

How To Make an Insurance Claim in Case of Theft of Car?

If your car is stolen, immediately file an FIR at the police station and inform the car insurance company. If the police fail to find it within the stipulated time of 90 days, it will issue a No-traceable certificate. The court will further issue a No-Objection Certificate after going through a thorough examination of the case, thus allowing the insurance company to carry out the inspection from their side.

If the insurance company too, fails to trace your car, it will ask you for the necessary documents including Registration Certificate (RC) of your car, your car insurance policy, the FIR copy from the police, your driving licence, your car keys and the like. They will then carry out with the claim settlement process. Your insurance company will reimburse the IDV or the current market price of your vehicle. If, however, you have purchased the return to invoice coverage along with your insurance policy, the insurance company will compensate for the purchase value of your car.

Common Claim Rejection Reasons

It is often common for insurance companies to reject your claim due to various reasons. In fact, they mention this in the insurance policies that they reserve all rights to accept or reject your claim or even make changes to your claim settlement terms. So before your claim gets declined, make sure that you avoid making the following mistakes.

• Producing incorrect information or details
• Submitting invalid documents
• In case you own a second-hand car, you have not transferred the ownership under your name from the previous owner
• You were under the influence of alcohol, drugs or other intoxicating substances
• You have brought upon the damages to your car deliberately, presumably for receiving the claim reimbursement amount
• You were careless while driving your vehicle
• You have failed to abide by the traffic rules and other legal aspects
• You did not inform your car insurance company about your loss or damage within the stipulated time
• You have repaired the damages caused to your vehicle without informing or contacting the car insurance company
• The insurance company finds that the claim amount is higher than the depreciated value or the current IDV (Insured Declared Value) of your car. In such a case, the company will reimburse the depreciated value of your vehicle.
• You have used your car for purposes other than those mentioned in your insurance policy
• You have filed a claim against an invalid or lapsed insurance policy

How To Avoid Rejection of Your Car Insurance Claim?

You can easily avoid your claim getting rejected by your insurance company by doing the following -

• Having a valid driving licence while driving
• Reading all the terms and conditions prescribed in your insurance policy
• Knowing your coverages, claim settlement ratio and the limitations well
• Avoiding driving in drunk or intoxicated conditions
• Carrying a copy of your car insurance policy all the time
• Learning and understanding about the claim procedures well

What is Claim Settlement Ratio?

A claim is basically an application or an appeal made to an insurance company for compensation as per the terms and conditions prescribed in your insurance policy. A claim settlement ratio is the percentage of the total claims settled by your insurance company in a fiscal year. This ratio helps determine the probability of the insurance company to pay or reimburse for the losses that you might face during the term period of the policy. It is, therefore, a measuring quotient used to decide whether your insurance company is reliable and trustworthy.

Here is how a claim settlement ratio calculated in any insurance policy -

Claims settled in a year

_____________________ x 100

Claims received in a year

Here is the list of Best Car Insurance Companies in Claim Settlement.

Checking an insurance company’s claim settlement ratio will be able to help you in determining whether it will be able to cover your losses in times of need. Compare various car insurance companies to check out for the best deal by having a rough idea about the likelihood of each of them to compensate for the losses incurred. However, besides the claim settlement ratio, you must also take care of the following two points while a car insurance company:

1. Financial Stability

Make sure your insurance company provides you with monetary stability. You can’t be running after your insurance company pleading for help in emergencies, such as a financial crisis. Ensure that you are not losing any of your hard-earned money, especially while larger sums are involved.

2. Quality After-Sale Services

The most crucial factor that you must check in any car insurance company is whether you are getting proper after-sale services, because you are going to need it. Your insurance company’s responsibilities are not over the moment you finalise a settlement with it.

For further reading:

How to Claim Car Insurance After Meeting an Accident in India

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.