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If you are a car owner in India, you may understand that having a car insurance policy is a mandatory requirement as per Motor Vehicles Act. So, when you buy car insurance, you abide by the law and get a financial safety net against unforeseen circumstances.
As soon as your car leaves the showroom, it is at risk of meeting any unforeseen damages/liabilities. Even if the damage is trivial, minor dents or scratches on your new car can be frustrating. When in this situation, the first thing that would come to your mind is whether it is wise to file a claim for just scratches or minor dents.
Accidents are unpredictable and cannot always be avoided as they may happen because of someone else’s fault as well. However, here are two questions for you to ask - does my car insurance policy cover minor damages and should I be raising a claim for minor damages.
A car insurance policy will cover any damages to your vehicle only if you have purchased a comprehensive car insurance policy or own damage insurance. A comprehensive policy offers greater coverage where you can claim for own damage and any third-party liabilities both. But just having a third party liability insurance would not cover any damages to your own vehicle as it solely covers damages done to a third party.
Now that it is clear that damages to your own car can be covered only if you have own damage cover or a comprehensive cover, is it wise to raise claim for minor damages?
Raising frequent claims pose you as a high-risk driver for the insurance companies. Thus raising a claim even for minor damages such as scratches increases the premium amount at the renewal time.
No claim bonus is a discount that the insurance companies provide for not raising any claim during the policy year. The NCB accumulated over the years can substantially reduce the premium in subsequent policy renewals. Therefore raising a claim for just scratches can nullify your No claim Bonus, thereby losing your discount on future premiums.
Voluntary deductibles are an agreement with the insurance provider to pay a certain percentage of the sum assured during claim settlement. If you have opted for a higher deductible, you will pay more when you raise a claim for scratches and lose the No claim bonus. Thus before you raise any claim for scratches, calculate your deductibles and weigh the costs of paying from your pocket.
Thus, even though it is possible to raise a claim for minor damages, one must consider the above factors before submitting a claim. If paying from your own pocket is beneficial in long run, one must avoid filing claims for minor damages.
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