If you bump your car while on the road or find a broken wing when you reach the car parking area your first thought to file a car insurance claim online, at the earliest. Although the main purpose of a car insurance is to compensate for such damages, there are certain situations where claiming insurance is not necessarily the right course of action. Listed below are a few scenarios, where not filing a car insurance claim is probably the best thing for you to do:-
Scenario 1- When the repair costs are less than or close to the Deductible
All Car Insurance policies specify a component known as the deductible. A deductible is the portion of any claim amount that the insured will have to bear from his/her own pocket. When you apply for a claim, only the balance after subtracting the ‘deductible’ amount is paid out by the insurance company. Hence, making a claim for a small amount that is less than or close to the deductible specified in your Insurance policy, is pointless as you would gain very little or nothing from the same. Deductibles are essentially of two types: Voluntary and Compulsory. As the names suggest, a voluntary deductible is the amount that you are willing to pay from your pocket at the time of a claim whereas, a compulsory deductible is a mandatory component of your insurance policy which is borne by the insured.
Scenario 2- When the repair costs are lower than the No Claim Bonus
If you have not made any car insurance claims within a given policy year, you’ll be entitled to receive a No Claim Bonus or NCB at the time of renewal. Every insurance premium has two primary portions i.e. own damage premium and third-party premium. The NCB is applicable on own damage premium which makes up for 80 per cent of the total car insurance premium. Therefore, the NCB discounts can be sizable even after disregarding the portion of the third party car insurance premium. Here’s an e.g. Mr. Sagar owns a Tata Indica and he pays a total premium of Rs. 10, 000, of which own damage premium is about Rs. 8000. Since he is in the second year of insurance cover, he will be eligible for an NCB of 20% of the own damage premium which amounts to Rs 1600. In case his car suffers damage and the cost of repair exceeds Rs 1600, Mr. Sagar should make an insurance claim. However, if the cost of repair is lower than Rs 1600, he shouldn’t make a claim because paying for the repairs will help keep the premium costs down and help him save money in the long run.
Scenario 3 – When the third party can pay your repair expenses
If your car meets with an accident and it is the other driver’s fault, you can file a third-party claim. That way, you can continue to enjoy your No Claim Bonus Benefits as it is only applicable for own damage premium.
Most insurance companies check your claim history to assess the risks you pose to them. Filing claims often may also result in increased premium. Therefore, it’s better to file a claim only when it’s necessary.
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