The increasing odds of accidents and damage to the car or other people while driving have increased the importance of car insurance claims. It provides financial backup when any unfortunate event occurs. Many people nowadays care more about the features covered under the policy and the cost of premiums. They overlook the claim process, which is essentially the most critical aspect. Understanding the claim process is vital to prevent future hassles. Let’s first understand the significance of car insurance claims and then get into details of two of the major types of claims prevalent nowadays.
Importance of Car Insurance Claims
Whether you purchase a two-wheeler or a four-wheeler vehicle in India, as per the Motor Insurance Act, you must have motor insurance coverage. You will realise the significance of the cover when you claim it. This means you will identify its worth when your car gets into an accident or is damaged, and you need compensation to cover the expenses.
Suppose you injured somebody or damaged your car during an accident. In such cases, you can claim the insurance coverage, and the corresponding motor insurance policy will pay for damages. If yours is a comprehensive insurance policy, and if your car gets stolen, then you can claim and receive the value of your car compensated. This implies that a car insurance claim will provide you with financial assistance during the scenarios discussed above.
Two major types of claims in car insurance are:
- Cashless insurance claim
- Reimbursement of car insurance claim
The point is which one you should choose among the two. You can avoid this confusion by thoroughly going through the sections below.
An Overview of Cashless Car Insurance Claims
A few years back, all motor insurance claims were financially compensated via reimbursements. Specifically, the insurance policy owner must first pay the expenses from their pocket and subsequently file for a claim. However, the introduction of cashless insurance claims has changed this scenario.
In the cashless car insurance claim option, every car insurance company that offers a motor insurance policy is associated with a list of garages across India. If the damaged car is taken to any of these garages and repaired there, the insurance company settles the repair expense with the garage. You need not pay for the cost. You will get your vehicle repaired and delivered. The insurance company directly pays the claim amount to the particular garage.
The cashless claim is valid only if the repair is undertaken in the garage included in the insurance company’s network list. You are held responsible only for the following costs:
- Consumables (if any)
- Compulsory deductibles
- Depreciation fees (if you have not taken zero depreciation cover)
The Process Involved In The Cashless Insurance Claim
The typical process involved in a cashless car insurance claim is described below:
- If an accident has happened, you should immediately contact your car insurance company and reveal the details.
- You must acquaint your insurance company with the garage address where you took the car for repair. Moreover, you must complete all the required formalities. In case of a death or any third-party involvement, the insurance company would request an FIR.
- After getting all the necessary information, the insurance company will appoint a surveyor to check your car’s condition (at the garage).
- The garage will repair your car once the surveyor has inspected and approved it.
- After completion, the garage will submit the invoice and repair bill to the insurance company.
- The insurance company will finally pay the claim amount to the garage after subtracting deductibles and depreciation charges.
Overview of Reimbursement Car Insurance Claim
After your car is involved in an accident, you can get it repaired in a garage not listed in your insurance company’s network. In this case, you will have to pay the cost incurred. The insurance company will reimburse the repair cost after you present the bill.
Remember to collect all the original and applicable repair bills from the garage and then submit them to the car insurance company. The reimbursement car insurance claim will pay the repair costs incurred after reviewing the bill.
The Process Involved In A Reimbursement Insurance Claim
Here are the steps involved in a reimbursement car insurance claim process.
- Firstly, you should notify the insurance company regarding the accident.
- Your insurer may ask you to submit documents like garage estimates and filled claim forms. If a third party is involved in the accident or a death occurs, an FIR is required.
- Once you submit the required documents, the insurer will appoint a surveyor to examine your car at the garage.
- The repair work will begin once the garage gets the approval from the surveyor.
- You must pay the garage the full car repair cost in this step.
- Submit bills, repair estimates, and other required documents to the insurance company for authentication. You can’t get the reimbursement without sending these documents.
- After document verification is completed, the insurance company will begin the reimbursement process. You will then get the claim amount.
Differences Between Cashless vs. Reimbursement Car Insurance Claims
Some key points of differences between these two claim options are described below.
Claim Settlement
In cashless car insurance claims, the insurance company immediately settles claims with the garage. This is because the insurance company has a direct tie-up with those garages and the concerned authorities.
On the other hand, in the reimbursement car insurance claim option, the insurance company reimburses the claim amount later. So, you first need to pay the bills from your pocket to begin the process.
Inclusion of Garage in the Insurance network
In the cashless option, if your preferred garage is outside the insurance company’s network, you can’t claim the repair expenses on your car. Hence, you must choose a garage that is on that list.
One of the tremendous benefits of a reimbursement car insurance claim option is that you need not waste time finding a garage. You can choose any garage irrespective of whether it falls into the list of the insurance company’s network. So it saves time during an emergency.
Compatibility With Garages
In the cashless claim option, you, as an insured person, can only visit garages that have tie-ups with your insurance company.
In the reimbursement claim option, you stay stress-free about the claim authentication. You can visit any garage and repair your car after an accident.
Processing Time
The processing time for claim settlement is less in the case of the cashless claim option. The reason is a direct tie-up between the insurance company and garages. So, your claim settlement process is completed within a few hours.
The processing time for the claim settlement is comparatively longer in the case of the reimbursement claim option. There will be several visits between the insurance company and the garage. You may have to visit these two places often until the car accident claim settlement is completed.
Risk Of Claim-Related Disputes
In case of a cashless insurance claim, the surveyor inspects the car damage and approves the repair. Thus, there are fewer chances of ambiguous claims and disputes.
However, in the case of reimbursement claims, the insurance company may encounter ambiguity in the repair expenses as the survey was not undertaken earlier. Hence, there are higher chances of disputes.
Cashless vs Reimbursement Car Insurance Claim: Which One To Choose?
In the cashless claim option, the insurance company pays the garage the claim amount. But in the reimbursement claim option, you will first have to pay from your end, and then you will get the claim amount. So, the question is, which one is better?
You can choose a cashless claim option if you prioritise quick processing time and are ready to select a garage only from the list of insurance company’s networks.
The reimbursement claim option will be more suitable if you want the flexibility to choose any garage you prefer and are willing to compromise with a long processing time.
Conclusion
Your claim needs can best determine which option to choose from the two. These options are dedicated to helping the insured get enough compensation to meet the expenses. You must thoroughly understand the claim process and be ready with all required documents. Subsequently, you can raise your claim and let it settle as soon as possible.
Frequently Asked Questions (FAQs)
How can I check if a particular garage is included in my insurance network?
Your insurance provider can provide a list of approved network garages. You can access this list easily online or via customer service.
Who holds the responsibility for the repair of a cashless car claim option?
In a cashless car claim, the surveyor is fully responsible for the car's repair. The surveyor will remove the car from the scene of the accident, take it to a garage, and then repair it. Subsequently, he will deliver it to the car’s owner. Note that the owner does not need to pay any towing or handling fees.
Which one offers faster processing time – a cashless or reimbursement insurance claim?
The cashless insurance claim offers faster processing time because the claim process gets completed within 2-4 hours. On the other hand, reimbursement insurance claims are typically slow due to the documentation and verification processes involved. So, you need to wait longer to receive your car accident claim amount.
