It feels fabulous to have your own car, doesn’t it? But, have you ensured that you’ve got the right insurance policy for your car? Now, you may wonder why people are stressing on having the ‘right’ insurance. After all, it is just another policy.
The biggest dilemma arises when your car suffers damage or is stolen and you need to claim insurance. At the time of making claims, majority of people are left in a soup. Why? Because they didn’t really understand half the terms and conditions of a policy when they first purchased it. Don’t let the same happen to you! Read further as we guide you through some of the best secrets related to car insurance claims.
Compulsory Deductible (Choose wisely, gain more!)
You may or may not have come across this term. But, don’t worry, we are here to break it down for you. When you make an insurance claim, the amount is paid to you only after taking into account the compulsory deductible. This deductible amount refers to a sum that the insured is required to shell out from his pocket before the insurance company pays off the claim amount. Sadly, it is a monetary loss which has to be paid off by the insured. But, as the name suggests, it is ‘compulsory’ and applies to all policyholders. This by no means reduces your premium.
Let’s take an example: You got your brand new car last year. (Probably your parents gifted it to you or you just surprised yourself with one). Buying motor insurance is compulsory, so you may force yourself into purchasing an insurance from, let’s say Company XYZ. They inform you that as per the car insurance policy, you are required to pay a compulsory deductible of Rs. 500. So, if your claim amount is Rs. 2,000, you spend Rs. 500 from your pocket while the balance is taken care by the company. But, wait! There is a catch here! Now, if the claim amount is lower than the compulsory deductible, the insurer won’t pay the claim.
At times, companies can trick you by prefixing the compulsory deductibles at a higher rate to ensure minimum claims. You need to be wise enough to check the IRDA site or consult experts before you pay your car insurance. If you got to win something, you have to lose something, right? Just make sure you lose less and don’t end up being fooled.
Depreciation Cover (Because even your car needs to age gracefully)
How does it feel when an annoying relative visits you every once a year, and devalues you by telling you that you look much older than before? To some extent, depreciation is just like that annoying relative to your hapless car! The older your car, the higher the depreciation. Note that depreciation charges differ from one car to another, based on the car model and the insurance policy you have chosen. Companies pay off your claim not before deducting depreciation charges. Typically, this amount will be lower than the actual repair charges. Insurers take into account the plastic, metal, fiberglass and every little depreciable component that goes into car-manufacturing. This deduction can go up to 50 percent, which means you will have to pay the remaining amount from your pocket.
Time for another example! Okay, so let’s assume you have the same policy from XYZ. After you pay off Rs. 500 as compulsory deductible, they now have to pay off the claim of Rs. 1,500 (From the total claim of Rs. 2,000). But, since depreciation cannot resist showing its ugly face, the company charges a maximum depreciation amount of Rs. 500. So, now the company happily pays off only Rs. 1,000 as your claim, while the rest is borne by you. But, guess what? You can actually get rid of the depreciation bit by choosing a depreciation cover.
The next question you may ask is, “How can I benefit from a depreciation cover?”
Here are some advantages that you wouldn’t want to miss out.
Gain 100% reimbursement on the depreciated parts at the time of claim settlement
Avail repair costs of fiberglass, rubber, tires, batteries, airbags, nylon, and plastic parts
Get depreciation claim for up to two admissible claims during the policy period
Depreciation cover can be availed by those whose vehicles are less than 5 years old from the date of purchase.
Consumable Cover (Don’t let minor components lead to major financial complications)
Consumables such as oils (engine oil, brake fluid, clutch fluid), coolant, and grease are not usually covered in a comprehensive policy. Why do you want to end up paying separately on them at the time of accident? A consumable cover comes to your rescue. This is one of the add-ons that you can choose, while selecting a comprehensive car insurance policy. Even if the price of consumables changes after an accident, the amount would still be borne by the Insurer.
No Claim Bonus (Every safe driver deserves a pat on their back)
How many times has it occurred that you have not claimed insurance for years? If you drive like a pro, then here’s what you need to know!
No Claim > No Accident > Safe Driver > Rewarded!
Your car insurance is like your best buddy is who there to watch your back when you go through some rough times with your beloved car. If you have been paying high yearly premiums on your car insurance policy and are still driving safely, Kudos! You need to be rewarded! Though disaster occurs without any intimation, you could happen to be among those fortunate ones who have always driven safely, escaping accidents. No Claim Bonus is thus meant for you as a token of appreciation for your flawless driving skills!
In NCB, the insurer provides a certain percentage of incentive to the policyholder for not making a claim during the preceding years. It means if you haven’t made any claim during a policy term, you are eligible for a discount on premium while renewing the policy. The discount on premium could be in the range of 20 percent to 50 percent. If you had five claim free years, your premium could be less by 50 percent.
The top 4 NCB hacks that you need to know
NCB belongs to you, not to your car!
Your insurer trusts your driving skills more than your car. So, even if you plan to change your vehicle, you can still transfer the NCB from one vehicle to another. It is also transferable from one insurer to another. However, the NCB cannot be transferred from one person to another. The only exception is in the case of a legal heir, wherein the heir inherits the car on the demise of the policyholder.
No NCB for third party cover
Of course, yes! “Why should a third party alone benefit if I am an awesome driver?” This is exactly what you may be thinking and we completely agree with you! Luckily, NCB is applicable only to own damage premium and not on third party liability. So, if you sadly happen to possess only a third party cover, you cannot claim NCB even if you have never made a claim.
Small claims can cause bigger loss
Small or big claim, how does it make a difference? Honestly, it does! Doing a cost-benefit analysis before making a claim is the ideal trick. Remember that even a small claim could make you ineligible for NCB. It’s wiser to pay small amounts from your pocket. Forgoing smaller claims would help you save up in the form of lower premium on renewal.
We bet you may not have heard of an NCB cover! The NCB add-on cover can protect your NCB even in the case of claims. So, you don’t have to lose out on the NCB percentage.
Keep a note of all these secrets that we have mentioned above, and you are good to go! Save up on car insurance money so that you stay less hassled at the time of claims. As the famous saying goes, "Whether it be money, time or heart; invest wisely!"