Car Insurance Claims: Is There a Limit Per Year?

Buying a car is a significant investment and insuring it with a car insurance policy is a legal requirement. A car insurance policy provides you with financial protection in case of damages caused to a third party or your own car. In case of damages, all you need to do is file a claim and the insurance company will cover the cost of the damages. Many times, car owners refrain from making a claim thinking that they can only claim for damages once or twice during a policy year. But that’s not true. Read on to know about if there are any limitations on the number of claims that can be filed in one policy year.

How Many Car Insurance Claims Can I Make in One Policy Year?

Generally, there is no such specific limit given by the motor insurance companies pertaining to the number of claims one can file in a year. This means that you can file as many claims as you need based on the damages you may cause.

Filing too many claims can lead to an increase in premium and you will also lose out on the NCB discount which is offered on the premium. If you insure your car with a zero depreciation add-on cover then there may be some restrictions on the number of claims you can file in a year, varying from insurer to insurer. On the other hand, roadside assistance comes with a restriction on the number of times a claim can be filed. At the time of renewal, Insurance company can also restrict the number of times you can file a claim depending on the previously filed claims.

How Many Car Insurance Claims are Considered to be too Many?

There is no such specific number that insurance companies consider to define the number of too many claims filed. Type of claim and extent of damage is considered. In case of minor damages, it is best to not file a claim as it also impacts the no claim bonus. File a claim only if the damages are severe.

What Happens if you Make Multiple Car Insurance Claims?

While there is no specific limit given by the insurance company on the number of claims you can file in one policy year, you should be aware that filing multiple claims can impact your policy in the following ways.

• No Claim Bonus:

  This is a discount offered by insurance companies for making no claim in one policy year. The discount can go up to 50% for making no claim for five consecutive years. Hence, making a claim means losing out on the NCB benefits.

• Higher Premiums:

  Insurance companies can charge you a higher premium if you frequently file for claims as the risk of insuring your vehicle is higher. Thus, to cover this, insurance companies will increase your premium at the time of renewal.

• Zero Depreciation Limit:

  With zero depreciation cover, the insurance company will not factor in the rate of depreciation at the time of claim settlement. However, there might be a limit on the number of claims you can file in one policy year.

• Deductible:

  Deductible in car insurance is the amount you have to pay out of your pocket before raising the claim. It is best not to file a claim in case the deductible amount is lower or slightly higher than the claim amount. With the deductible component, you will receive an inadequate claim amount.

How to decide whether to file a car insurance claim or not?

Given below are few scenarios under which it is best not to file a car insurance claim

• When claim amount is lower than the deductible:

  In case if the claim amount is Rs. 5,000 and the deductible is Rs. 6,000 then it is best not to file the claim as you will have to pay Rs. 5000 out of your pocket.

• When the NCB is higher than the claim amount:

  It is advisable not to file a claim when the no claim bonus discount is higher than the total repair cost.

• Minor damages:

  Settle claims out of your pocket if scratches in case of minor damages like small dents or broken mirrors.

Consider filing car insurance claim in below scenarios

• Damages are severe i.e. a high amount is required for cost of repairs
• In case of vehicle theft you must file a claim to recover the amount up to the mentioned insured declared value
• In case the claim amount is higher than the insured declared value of the vehicle

A car insurance policy protects you against financial damages. Thus, having the policy protects you against financial losses caused due to an accident or theft. While you can easily claim for the damages, it is important to keep in mind the drawbacks as well to ensure you don’t lose out on the NCB benefits or end up paying a higher premium.

Also Read: Here are Few Reasons on Why You Need to Purchase HDFC ERGO Car Insurance Online