We live in a world governed by convenience, and most insurance companies are now striving to offer as many services as possible to heighten our sense of ease. One such service is a cashless car insurance claim, which helps you make the whole claims process a hassle-free one.
Let us delve into what exactly this is and how it benefits you!
What is a Cashless Car Insurance Claim?
During an unfortunate event like a car accident, we all know that the policyholder can raise a claim to cover the expenses for the damage done to the car and to him/her. The insurer provides the compensation through two claim processes – a Cashless claim or Reimbursement claim. While the latter is the more common type of car insurance policy that most people opt for, the former is gaining a ton of favour, rather quickly.
During a cashless claim, you do not have to pay for the damages out of your own pocket initially and then wait for reimbursements. The insurer directly makes the payment to the concerned garage. However, you need to make sure that you only visit the garages that fall under the network of the insurer to avail of this benefit. One thing that you need to keep in mind is that it is not a completely cashless process. The policyholder needs to pay some part of the expenses, in the shape of depreciation and compulsory deductibles.
Let's understand this with the help of an example-Akash was parking his car and suddenly he lost control and his car collided with the wall of the parking. The car got damaged thus he approached his insurance company for the claim. Akash opted for a cashless claim settlement and visited the network garage of his insurance company to repair his car. After the inspection of the car, the repairing work was started, and then came the time to pay the bills, Akash did not pay anything and his insurance company directly paid the bills to the network garage. However, Akash only had to pay the cost of a few consumables like nuts and bolts as he did not opt for a consumable cover along with his insurance policy.
How do Deductibles Influence the Price of the Car Insurance Policy and Claim Amount?
To put it in simple words, a deductible is the amount of money that the policyholder needs to pay as part of the claim. The major reason for introducing such a practice is to encourage people to drive safely and discourage them from making claims even when there is no real need.
Now, these deductibles can be divided into two categories, called compulsory and voluntary. The names should be self-explanatory, and you can learn more about them by reading this article.
The price of the compulsory deductibles depends on the insured car engine’s cubic capacity, which is shown in this table.
|Engine cc||Compulsory Amount|
|Up to 1500cc||INR 1000|
|Above 1500cc||INR 2000|
Coming to the voluntary deductibles, it is up to the policyholder to decide this amount. Based on the same, the premium amount and claim pay-out will vary. In other words, the more you are willing to pay at the time of the claim, the lower will be the premiums that you end up paying.
Is Cashless Insurance Better Than Regular Reimbursement Insurance?
If you are looking for a hassle-free claim process, then cashless insurance is always better than the regular reimbursement insurance claim process. It is simply because you no longer have to collect all the bills of the payments you have made and look after the documents for months, till the claim amount is cleared.
Moreover, it can get quite difficult for you to pay the hefty bills in case of a serious accident. Imagine having to go through the pain of injuries and then bearing the financial loss out of your own pocket as well. Do not forget the lengthy claim process later on. Considering all this, the cashless insurance claim is definitely better than the reimbursement option.
Furthermore, without the anxiety of a financial burden on your head, you will be able to focus on your recovery fully. You just need to pay a small amount of the total claim and you will be assured of getting the bills cleared on time.
Are There any Other Expenses That the Customer Needs to Bear?
Yes, you need to bear some of the expenses and they are as follows:
|Depreciation||Since the car-owner has used the car in its best condition, he/she will have to pay the depreciation amount of the damaged parts till date. You can select a zero depreciation add-on cover while choosing your insurance policy to avoid the financial hassles of paying the depreciation amount. The add-on cover ensures that the company will bear the expense.|
|Consumables||If things like nuts, bolts, lubricants, oils and more are changed during the claim process, then the policyholder must pay for this. It is because these parts have to be changed on a regular basis. However, if the policyholder has bought an add-on cover for the consumables as well, then the company will bear this expense.|
|Deductibles||Deductibles are basically introduced to discourage car owner-drivers from making unnecessary claims and to encourage safe driving. It refers to the amount that the policyholder must pay while making the claim. Compulsory deductible amount is dependent on the car’s engine capacity. Voluntary Deductible amount is applicable only if you had opted for it at the time of purchasing car insurance.|
What is Covered Under Cashless Claims in Car Insurance?
- To start with, the insurance company will cover the charges incurred to repair the damaged parts but not the depreciation.
- If the car owner-driver has injuries, then all the hospital treatments and the associated bills will be covered by the insurance company instantly.
- Moreover, in case of the death of the policyholder, the family will get the full insured amount within a short turnaround time.
- Apart from all this, the car insurance company also covers the labour charges. So, you do not have to pay the personnel repairing your vehicle, which is something that is usually charged separately.
Now that you know the amazing benefits of cashless claims in car insurance and how they work, you must have realised that such policies can bring a lot of convenience to the table. Based on your needs, do consider such policies when looking to renew your car insurance.