Dealing with the pain of having damaged your most prized possession - your car - can be a task unto itself. All that paperwork, legal jargon, and miniscule fine print of the car insurance might make this process all the more difficult. This article will offer you a simplistic overview of how your car insurance works and will resolve all your queries regarding the same!
What Scenarios are Covered Under a Claim?
Your comprehensive car insurance ensures that you are cushioned from all the financial losses that occur in case of –
- Natural causes like floods, storms, lightning, earthquake, landslides, etc.
- Man-Made causes such as accidents, collisions, accidental fire, theft, burglary, external damages, etc.
Please note: Most car insurers cover for Third Party Losses i.e. they pay for property and car damages/bodily injuries/death caused to a third-party person by the insured’s car. They also provide compensation for personal accidents if it leads to death or disability of the policy owner.
What is the Claims Process?
The insurance industry has brought about a rather seamless process for cashless claim settlement. A broad overview of the same (subject to minor differences, as mentioned in the policy) is as follows –
*Please note: The claim intimation number can be found out by calling the toll-free number of the insurance company that has offered the policy.
However, if the car insurance policy is a Reimbursement Policy, then the payment will have to be made by the insured directly to the workshop/ garage concerned and the insurance company will make payments within a stipulated time to the insured on receiving the final documents.
Is There a Time Frame within which the Insurer must be Informed to File a Claim?
It is prudent to claim at the earliest to avoid any questions being raised on the legitimacy of the insured’s claims. In case of an accident, most insurance companies have a claim intimation deadline of 48-72 hours. However, it is advisable to refer to the terms and conditions of the policy document as variations might exist.
Can a Policyholder File a Claim in Case the Policyholder wasn’t Driving the Car When the Car Accident Happened?
Yes, indeed. The apex court of India has held that so long as the vehicle is insured in the name of the registered owner, the insurer would be liable to uphold the terms of the policy. However, the insurer's liability may be repudiated on the basis that the car was driven in the absence of a valid driver’s license or that it was driven under the influence of alcohol.
Can a claim get rejected?
Standard exclusions in a car insurance policy are-
- Delay in claim intimation.
- Damages caused when the car has been driven under the influence of alcohol or in the absence of a valid driver’s license.
- Damages caused due to war and similar conditions.
- Damages caused are not a direct consequence of the accident. For example, if you drive a damaged car, without due regard to its condition, and that has led to further engine damage, then such losses will not be covered under the policy.
- If the insurer is of the belief that the information provided in the application was inaccurate, false, or fraudulent. For example, the insured has purchased the policy claiming that the car was used for private purposes, whereas in reality, it was used as a taxi.
- If the declaration made on the car specifications such as engine make, capacity, etc. no longer hold good by virtue of the modifications made, and the insurance company has not been informed of the same.
Additional exclusionary clauses -
g. If the insurer comes to the conclusion that it was the insured’s fault (entirely or partially) for the theft of the vehicle.
h. If the insured is unable to provide documents/ receipts to back up claims of the items that were deemed to have been stolen.
What Documents are Needed to File a Claim?
Common documents to be submitted in case of own damage, third-party liability, or theft–
- Original insurance policy document.
- Tax payment receipt.
- Duly filled and signed claim form.
- Copy of vehicle’s registration certificate (RC).
- License copy of the driver driving the vehicle at the time of the accident.
- An estimate of the vehicle repair cost.
- Repair bills and payment receipts (original).
- Vehicle inspection address details.
Additional document needed in case of –
1. Third-party Liability
- Copy of the FIR/Police Panchnama.
- Claims Discharge Cum Satisfaction Voucher needs to be submitted. Remember to submit with a sign across a Revenue stamp (if the insurance money is to be directed towards the repairer).
- Authenticated theft declaration from the RTO.
- Details of the previous insurance policies such as company, policy number, duration and time of insurance, etc.
- Additional informative handles and accessories, including warranty cards, booklets, duplicate keys, etc.
- FIR and final no-trace report of the police.
- Official intimation to the RTO about theft and discontinued use of the vehicle.
- Letter of Subrogation.
- Claim Discharge Voucher (produced with signature across a revenue stamp).
- Form 28, 29, 30, and 35 of the RTO (downloadable from the VAHAN website).
Why is it Important to Collect Evidence at the Time of an Accident?
It is extremely important to collect documentary and oral evidence at the time of the accident to help establish the legitimacy of the claim and also to ascertain the quantum of damages. Some of the evidences that will prove rather useful are – photographs (ensure they are taken from various angles and capture the debris from the collision, skid marks, view of the other driver, damage caused, etc.); witness testimony and their contact details, and any official records in the form of FIR, the officer’s assessment of the accident, etc.
Should You File an FIR after an Accident? Will it Help the Claims Process?
An FIR is always recommended in case of major accidents where there is death, bodily injury, or severe wreckage to the vehicle. However, it may be avoided in case of minor accidents like denting of the car.
Which is Better – cashless Claim or Reimbursement Claim?
Both forms of car insurance namely, cashless claim or reimbursement claim, come with their own benefits and drawbacks.
No payments need to be made by the policyholder upfront. The insurance provider will settle the claims.
Need not get the car repaired in the network car garages of the insurance company.
Might not be completely cashless as certain deductibles and default depreciation have to be covered by the policyholder.
The car will be repaired in the network car garages of the insurance company.
Payment has to be made by the insured and reimbursement will be received only if all the documents are duly submitted.
Who can Make a Claim?
The claim must be filed by the policyholder. Under third-party insurance, a third party, who has suffered injury, death, property damage caused by your car, can file a car insurance claim for compensation.
What is the Role of Compulsory and Voluntary Deductibles at the Time of Car Claim?
Deductibles are provided for in policies to lower the incidence of claims, for instance, compulsory deductibles may discourage policyholders from raising small claims and may even nudge policyholders to develop a cautious driving habit.
Compulsory deductibles are fixed by the insurers and in the event of a claim, the amount needs to be compulsorily paid by the insured. This does not affect the premium rate in any circumstance.
Voluntary deductible, on the other hand, is the limit chosen by the policyholder to meet a part of the claim from one's pocket before raising the claim. Increasing the quantum of voluntary deductible reduces the premium through discounts.
Is Car Inspection Mandatory for Filing a Car Insurance Claim?
Yes, it is mandatory. A physical inspection will be done by an authorized surveyor of the insurance company to appraise itself of the estimated cost of repair and to gauge if the claim is bonafide.
How much Time does the Insurance Company Take to Settle the Claim?
Most insurance companies take around 14–28 days to settle the claims. However, this may vary based on the type of claim and the company’s terms and conditions.
How much does the Insurance Company Pay in case of a Claim Under Car Insurance?
The maximum amount is up to the Insured Declared Value (IDV) as mentioned in the policy. However, the total claim amount is dependent on three main factors – the term of the insurance contract, the extent of damage assessed, and the amount of depreciation that leads to IDV, and compulsory and voluntary deductibles.
Is There an Option to File a Claim Online?
E-claims are becoming increasingly common with digitisation. Different insurance companies offer their own means of doing so. Some insurers provide self-inspection or a live video inspection feature on their Insure app that helps register the accident claim instantly and get immediate approvals.
Is There any Process to Re-file the Claim in Case the Insurance Company Rejects the Claim?
If the insured believes that the rejection of the claim was unfounded, then there is no provision for refiling the claim. However, the insured can take recourse to write a formal complaint to the insurance company. If the insured receives a poor/ negative response from the company and is unhappy with the outcome, the matter may be escalated to an Insurance Ombudsman. As an alternative, the matter can be escalated to the Insurance Regulatory and Development Authority (IRDA), if the company does not respond to resolve the matter to the insured’s satisfaction within 15 days of the complaint.
Can a Claim be Raised with an Expired Car Insurance Policy?
No claims may be raised on an expired car insurance policy, even if the claim has arisen just the day after the insurance has expired. Additionally, valid car insurance is a mandate of law and it is a punishable offense if the owner of the car is driving in the absence of one. Therefore, the previous policy might be renewed at the earliest, or new insurance may be purchased.
Comprehensive car insurance offers some respite in the event of damages to one’s vehicle. It is imperative that one exercises all due diligence and makes the claim well within time, following the requisite procedure, in order to derive the maximum benefit out of it.