Is There a Limit on The Number of Claims in A Car Insurance Policy in India?

Posted on: Mar 3, 2023 | | Written by:

Is There a Limit on The Number of Claims in A Car Insurance Policy in India?

Published on March 02, 2023. EST READ TIME: 4 minutes

Buying a car is one of the larger investments that one can make. Since it costs a considerable amount of money, it only makes sense to insure your car. Not to forget, car owners are legally required by the law to buy a car insurance policy. Failing to insure your car can lead to a lot of financial risks, starting with a hefty fine for driving without one. Here are more details about car insurance claims.

What is car insurance?

As the name might suggest, a car insurance policy is an insurance policy that protects your car against unforeseen events. It is an arrangement between you and an insurance provider where you must pay a car insurance premium for a pre-determined term. And the insurance provider will insure your car for the same. It protects you from any financial losses in the event of an accident or theft of the car.

You can choose from different types of car insurance policies. A third party car insurance policy offers minimal protection and is a statutory requirement. The low coverage translates to lower premiums. A comprehensive plan, on the other hand, offers the benefits of a third-party plan and offers coverage for its own damage. Thus, the premiums are a bit high.

Alternatively, you can choose pay-as-you-drive policies. It is ideal for people who want to get comprehensive coverage but do not drive their car much. Thus, providing a good balance between affordable premiums and adequate coverage. You can also choose to buy a standalone own-damage car insurance policy. If you already have a long-term third-party liability policy, a standalone own-damage cover would make way for better policy coverage.

How many times can you claim your policy in a year?

If you are wondering how many times I can claim car insurance in a year, the simple answer is that there isn’t a number. Also, there aren’t any limits to the claim amount if your car has unfortunately met with several accidents. However, there can be repercussions for claiming your insurance and doing it multiple times. For starters, you stand to lose no claims bonus if you claim your car insurance policy. Also, there is a possibility that if you claim your policy too many times, you might end up increasing the policy premium during renewals. Insurance companies might find it a bit risky to provide insurance to someone who makes multiple claims in a year.

On the other hand, if you have opted for a zero-depreciation car insurance policy, there might be a few restrictions on the number of times you can claim the policy. These restrictions vary based on the insurance provider. Thus, it might be a good idea to read the fine print of the policy before buying one.

How many policy claims are too many claims?

If your car has met with an accident, it is only sensible to claim your policy for the damages. However, it is a good idea to restrict the claims to major or severe damages. Claiming your policy for every minor scratch or dent might not be the best move. For example, paying for the repair of a dent on the bumper or a broken mirror from your pockets might be a good idea`g rather than filing for car insurance claims.

What if I make multiple car insurance claims during a year?

If you file your car insurance policy several times during a year, it can have the following impacts on your car insurance premium.

1. Limit on zero depreciation.

A zero depreciation add-on ensures that you do not end up paying for the costs of depreciation when you claim your policy. Some of the insurance providers might have a limit when it comes to claims for zero depreciation add-ons. Once you reach the limit, the subsequent claims will not cover the cost of depreciation, and you must pay for them from your pockets.

2. Loss of NCB

Insurance companies reward policyholders with no claim bonus if they do not make any claims during the term of a policy. NCB can bring down the cost of the premium by a considerable margin. And if you file for car insurance claims several times or even once, you stand to lose the benefits of NCB.

3. Higher policy premium

When you make multiple claims during a year, it increases the chances of a higher policy premium during policy renewal. More claims simply mean that insurance providers see you as a high risk to provide insurance. Thus, they might bump up the car insurance premium to provide coverage.

4. Pay deductibles

Car insurance policies have a mandatory deductible component. Every time you claim the policy, you must pay the deductible, and the insurance company will pay the remaining amount. Thus, one must be cognizant of the deductible while filing a claim.

Is it sensible to file claims for small amounts?

This is a common conundrum that a lot of car owners face. Whether or not to file their car insurance policy for small amounts. Though there is no hard and fast rule about claims, it all comes down to basic maths. Here is a simple example.

Your car insurance policy has a mandatory deductible of Rs. 2,000, and you have accumulated NCB of Rs. 4,000. Your car’s mirror is broken, and the cost of replacement of the same is Rs. 4,000. If you were to claim your policy, the insurance provider would only pay Rs. 2000 after deducting the mandatory deductible. Also, you will stand to lose Rs. 4,000 as NCB. In this specific example, paying for the mirror repair from your pockets would make more sense.

On the other hand, if the damages were a bit more severe, such as damage to two doors and the running board and the cost of repairs is Rs. 12,000. It would make sense to file your car insurance policy. Even after the mandatory deductible and loss of NCB, the overall repair cost will be Rs. 6,000.

Thus, one must consider these factors while filing a claim for smaller amounts. If the cost of repair is less than the deductible or slightly higher than it, not filing would make more sense. And it results in better savings in the long run as well.

Conclusion

If you are wondering how many times I can claim car insurance in a year, there aren’t any limits. However, depending on the type and extent of the claims, there can be some impacts on your car insurance policy. Above are all the impacts that multiple claims can have on your car insurance policy. Also, if you want to make the most of your car insurance policy, it might be a good idea to assess the claim amount before deciding on a claim.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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