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How Cashless Garages Work?

By Vikas Chandra Das
21 July 2022, 11:46 AM

As countries around the world are fast transitioning to digital, cashless economies, companies, businesses and industries are fast adapting to these changes and are trying their best to keep up. The insurance sector is not far behind either.

The idea of cashless health insurance policies which guaranteed instant entry into the hospital with medical treatments being taken care of by the insurance companies was the first segment in the insurance sector to have embraced cashless transactions and it was a success. This popularity got car insurers too to introduce cashless car insurance products.

The Basic Idea of Cashless Garages

The basic idea behind cashless garages in a car insurance policy is that the insured gets a chance to repair his or her car in the network garages of the insurance provider without shelling any money from his or her pocket.

The bills will be settled by the car insurance company with the network garage on the completion of all the repairs. However, this facility may only be availed if the policyholder goes to the network garages of the insured.

How does It Work?

In the event of an accident, the garage or the service centre repairs the policy holder’s car as per the cover applied for. The insurer will send an authorized person to assess the damages caused to the car and will verify the veracity of the claims made.

Thereafter, the service centre is expected to repair the cars and forward the bills and accompanying documents to the insurer for final settlement. The insurance company will then re-verify the bills and once satisfied with the correctness of the claim, the insurer will settle the claim directly with the network garage.

The process of cashless claim has been outlined in detail below –

  • Inform the insurer about the Claim Intimation Number* at the earliest.
  • Submit a claim form along with requested "proof of loss" documents in the correct format to the insurance company.
  • A surveyor will be appointed to inspect the car and assess the damage caused.
  • All bills, receipts, and documents (in original) have to be submitted to the insurance company.
  • Payment will be made by the insured directly to the workshop/garage.

Please note: Most car insurance policies have standard exclusion clauses mentioned in the policy. Care must be taken that these clauses are perused before any claim statement is filed to prevent rejection based on these exclusionary clauses. 

For example, damages caused when the car has been driven under the influence of alcohol or in the absence of a valid driver’s license is a standard exclusionary clause that prevents the insured from availing of a cashless claim.

Advantages of Cashless Garages

  • One may learn about the list of network garages or cashless garages closest to them by contacting the insurer on the toll-free number provided. It can be easily accessed even on the website of the insurer.
  • No hassle experience as the work of the policyholder is reduced to informing the insurer and then waiting for the repaired vehicle to be delivered back to your hands.
  • No need for prolonged paperwork to file claims.
  • Reduces the need for ‘cash collection’ reducing the financial stress on the insured.
  • Assured quality repair work.
  • One can use the money for medical treatment without having to worry about investing money into repairs.

Are There any Hidden Clauses?

  • The cashless service is only for those repairs and services that have been expressly included in the policy cover. Anything beyond the scope of the policy such as damage to gadgets, damage to components in the engine, etc will not be covered and the policyholder will have to bear the expenses incurred for the repair of these parts.
  • A cashless garage facility cannot be availed if one’s car breaks down in the middle of the road and the insured requires assistance. Insurance companies offer an entirely different add-on for such circumstances known as the roadside assistance add-on and one must avail that to get assistance from the insurer.

Disadvantages of Cashless Garages

  • One cannot avail of the service if he or she wishes to get the car repaired at the nearest garage and not in the network garages mentioned.
  • The cashless garage facility might not be available at all locations. If the cashless garage is available only at a distant location, then it becomes difficult.
  • The car owner has to pay for the compulsory deductibles as pre-determined in the insurance policy. For example, deductions due to depreciation of the car.


The cashless claim settlement process comes as a boon for car insurance policyholders. The three key takeaways that one must keep in mind for cashless settlement of claims in network garages is -

  • to keep the insurance company in the loop at all times,
  • to record all communications, documents, and evidence concerning the unforeseen incident and claims thereafter and,
  • to be nimble-footed and vigilant throughout the entire process!
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