Claim Settlement Ratio In Car Insurance Important Things You Must Know


21 Jul 2023

Read about the What is Claim settlement ratio, how it is calculated & what its types are. Check out Kotak General Insurance's car insurance policy for more information.

A car insurance policy is a mandatory requirement for all car owners in India. If you own a car, you must have at least third-party liability insurance. If you ever get into an accident, a car insurance policy helps you get financial protection against the repair costs and the damages you may incur.

You can get the compensation from the insurance company by making a claim against the repair cost and the damages suffered. The insurance companies receive many such claim requests every year, and unfortunately, not all claims are accepted and honoured.

Although instances of claim rejections are rare, the insurer has a valid reason for the rejection, which is communicated to the policyholder. Typically, the insurers reject the claim because they suspect the claim is fraud or the policyholder does not have enough coverage.

As a car insurance policyholder, you must check how many claims the insurer has settled successfully in a year out of the total requests received. If you are wondering how to check that? The IRDA (Insurance Regulatory and Development Authority of India) publishes this data every year on its website which is known as Claim Settlement Ratio.

What is the Claim settlement Ratio?

Every year, IRDA releases an annual report, which contains extensive details relating to the insurance sector. It mentions details like the car insurance claim settlement ratio of the insurance companies in India. It is essentially the number of claims a specific insurer has settled successfully against the request they received within a particular period.

When you buy car insurance online, you must look at the insurance company’s claim settlement ratio before making your final purchase decision. It is an important yardstick to measure the trustworthiness of the insurer in settling the claim. It is better to check the claim settlement ratio of the insurer beforehand as it helps you understand the likelihood of the insurer paying for your loss.

How is the claim settlement ratio of an insurance company calculated?

All experts recommend insurance buyers to purchase a policy from an insurance company that has a high claim settlement ratio. But do you know how the ratio is calculated? It is based on a simple formula.

CSR is calculated as claims settled in a year divided by the total claims received in a year multiplied by 100. The higher the claim settlement ratio of an insurance company, the better your chances of getting your claim request settled successfully without any hassles.

What are the types of claim settlement in car insurance?

Generally, the insurance companies in India offer two types of claim settlement for car insurance – cashless claim and reimbursement claim.

• Cashless claim

When you get your car repaired at a specific garage that is part of the insurance company’s network, you need not pay a single penny from your pocket. You only have to raise a claim, and the insurer after assessing the cost will directly settle the bill with the garage. This is called a cashless claim. However, you must know that if your policy has any mandatory or voluntary deductible, you would have to bear the difference amount.

• Reimbursement claim

When you get your car fixed from a garage that is not part of the insurer’s network, you must file a reimbursement claim. Here, you must first pay the bill from your pocket, and submit the bills and receipts to the insurer along with the claim settlement form. After assessing the cost, the insurer will pay back or reimburse the amount sans the deductibles.

Final Word

Thus, the claim settlement ratio of the insurance company plays a vital role in getting your claim settled faster and without any hassles. If you are looking for an insurance company with a high claim settlement ratio, you can consider buying a policy from us; Kotak General Insurance, as it has a claim settlement ratio of about 82.81%, which is considered quite high in the Indian market.

Just as the blog emphasized the significance of the claim settlement ratio in car insurance, the claim settlement process for health insurance plans and bike insurance online is equally crucial. Understanding the distinctions between cashless and reimbursement claims is vital, ensuring a smoother and hassle-free experience in settling claims across various insurance categories.

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The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.