image title

Secrets About Your Car Insurance Claims That You Probably Didn't Know

Janhavi Shinde Janhavi Shinde 21 March 2016

Want to master the trick of investing wisely in car insurance? Then check out the secrets that your insurer would usually prefer hiding from you!

Car Insurance Claim

You put your sweat and blood to buy a car that you always wanted to. Save for the down-payment, regularly pay the EMI's and finally get an insurance cover.

Undoubtedly, third-party car insurance is mandatory for vehicles plying on Indian roads.

But, WAIT!

Did you ensure you bought the 'right' car insurance policy?

Many may think, why stress so much about a car policy?

But, let me tell you that it's a business for insurance companies and that there are many hidden conditions which you may not be aware of.

After all, no one wants to get stranded when a claim arises!

Today, I am going to share some of the deep secrets that your car insurance provider would prefer not telling you.

This will definitely help you get a better price for your car insurance premium as well as while filing a claim.

Secret 1: Did you choose your Compulsory Deductible wisely?

This might sound as an insurance 'jargon' for many.

But, if you select this component wisely, trust me, you will certainly gain more from your car insurance policy!

Let me break down the meaning of compulsory deductible in a lay-man's language for you.

Compulsory deductible is nothing but the sum that you need to pay from your own pocket before the insurance company pays off the claim amount.

Many of us have a myth that this compulsory deductible reduces your premium amount.


By no means will this component help you in reducing your car insurance premium.

Let's make it even simpler with the help of an example:

Your parents gifted you a brand-new Corolla on your 25th birthday from some reputed car company!

WOW! Congratulations!

Your insurance provider tells you to pay a compulsory deductible of Rs.500.

In case you file a claim of say Rs.2, 000, then you spend Rs.500 from your pocket while the balance is taken care by the company.

But, WAIT!

Your insurance provider will not tell you that if the claim amount is lower than the compulsory deductible, then your claim will be rejected!

After all, insurance companies are running their business.

Very conveniently, they trick you by prefixing the compulsory deductibles at a higher rate to ensure minimum claims.

So, be smart and act wisely to check the IRDA site or consult experts before you pay your car insurance.

Just make sure you don't end up being fooled.

Secret 2: Comprehensive Cover: But, is everything covered?

Comprehensive car insurance cover is a cover that is not mandatory. But, it is recommended to buy one.

But again is everything covered under a comprehensive or a package policy?

NO. What the comprehensive policy covers is the third-party cover, loss and damage to the vehicle due to accident, theft, natural calamities, etc. and personal accident for the occupants.

So, is depreciation covered under a comprehensive car insurance policy ?

Let me explain you in detail.

'The older your car, the higher the depreciation.'

Car insurance companies pay off your claim amount only after deducting depreciation charges. Depreciation charges are different from one insurer to another.

Your car's model and the insurance plan you choose says it all.

At times, this amount will be lower than the actual repair charges.

With such type of name 'bumper to bumper', do you think your insurance provider will cover all that needs to be insured?


Insurers take into account the plastic, metal, fiberglass and every little depreciable component that goes into car-manufacturing.

Here again there's a catch!

Your insurance provider will not tell you that the deduction can go up to 50 percent, which means you will have to pay the remaining amount from your pocket.

Let me make it even simpler with another example!

Let's say you slap a claim amount of Rs.2000 on your insurance provider.

You pay off the compulsory deductible of Rs.500.

The insurance provider will 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 (except salvage)
  • 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.

Secret 3: Are you a safe driver? NCB is awaiting!

Yeah, we all tend to care and nurture our prized possession. We try to be as safe as possible while driving.

But, how many times has it occurred that you have not claimed car insurance for years?

If you drive like a pro, then here's what you need to know!

Safe driver> No Accident> No Claim> Reward (No Claim Bonus)!

The No claim bonus has earned another moniker like NCB.

No claim bonus is a reward in the form of discounted premiums that your insurer pays you for being a good driver!

This discount on premium ranges from 20% to 50% for 5 years.

But, did your insurer provider tell you that..

  • NCB is a reward for you and not for your CAR!

    Well, if you plan to change your vehicle, you can still transfer the NCB from one vehicle to another. You can also get it transferred from one insurer to another.

    But, NCB is not transferable 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.

  • NCB is applicable only for comprehensive cover

    Of course, yes!

    If you possess only a third-party cover, you cannot claim NCB even if you have never made a claim.

    Luckily, NCB is applicable only to own damage premium and not on third party liability. It doesn't make sense for a third party to benefit for you being an awesome driver!

  • Smaller claims make you lose your NCB earned

    True that!

    You can save your NCB by not making smaller claims. You can bear smaller expenses rather than losing on the NCB earned over the years.

    Forgoing smaller claims would help you save up in the form of a lower premium on renewal.

The Verdict

Insurance companies might help you out in your difficult times. But, not always will they inform you about their hidden terms and conditions. Be an informed customer, do not get fooled.

I am sure the above tips are good to go! Invest smartly in a car insurance without getting hassled at the time of claims. As they rightly say, 'the best customers are armed with knowledge'.

Janhavi Shinde
Written by Janhavi Shinde
Right from being a Flight Attendant to a Banker and now to a Content Writer, she has tasted success in all the fields. The kinda girl who loves pets and knows how to manage difficult people and events.