Reimbursement Vs Cashless Car Insurance Claims


04 Aug 2023

Check the claim process, inclusions & exclusions for car Insurance. Know the difference between reimbursement & cashless claim. Learn more with Kotak General Insurance.

One of the many factors that you must check before buying a car insurance policy is the claim settlement options. Almost every insurance company today offers both reimbursement and cashless car insurance claim options. Both of these types of claim processes have their own significant importance. While you are pondering over your decision to buy car insurance, you must check with the insurer about the claim processes, their inclusions, and exclusions. It may help you make a precise decision.

However, before you check with your insurance, let’s get you informed all about the reimbursement and cashless car insurance claim process.

What is a reimbursement car insurance claim?

In the case of a reimbursement car insurance claim, your bills are reimbursed by your insurer later when you file the claim. Hence, in situations like car damage or personal injury, you can get it fixed by paying the expenses from your own pocket, and later file for a reimbursement so and settle the amount with your insurer.

Things to know about reimbursement car insurance claims

1. Freedom to choose the garage

If you choose reimbursement claim settlement, you can go to any garage of your choice. So, if you already know a garage that you trust, you can use this type of claim settlement process to your advantage.

2. Longer turnaround time for settlement

At the time of an accident or damage, you will pay the bills by yourself. Once you are done with it, you can file for a settlement with your insurer. This is a long process because it involves a lot of back and forth. Even though the turnaround timeframe for claim settlement is longer, you must inform the insurer about the damages as soon as possible.

3. Keep all the documents in place

Since you are paying the bills upfront and filing the claim later, you have to accumulate all the bills and documents and keep them in check. This will include documents like invoices, receipts, cancelled cheques, FIR, ID proofs, license, etc. You must check the required documents with your insurer beforehand.

4. You will need to make arrangements for emergency cash

This is one of the most important things to know about the reimbursement car insurance claim settlement process. You will always need to save up for emergency funds. Even though the expenses will be reimbursed, at the time of repair, it’s upon you to pay all the bills.

What is a cashless car insurance claim?

Under a cashless car insurance claim, you do not need to make an upfront payment to repair the damage caused to your car. You can just inform your insurer and they will make the necessary payments directly to the garage.

Things to know about cashless car insurance claims

1. Go to the listed garage

In the case of a cashless car insurance claim, it is mandatory that you go only to the garage that the insurer has a tie-up with. Otherwise, your claim will be rejected.

2. Less turnaround time for settlement

When your car faces any damage, you must immediately inform your insurer. Once you have reached the garage, the insurer will take care of the settlement from there. Hence, your repair expenses are paid and your claim is settled in a short span of time.

3. Documents

In the case of cashless claim settlement, your insurer directly deals with the garage; hence, you will not need to keep your bills and receipts in check. But you will need some basic documents like ID proof, claim settlement form, license, etc. The paperwork in cashless claim settlement is minimal compared to reimbursement claim settlement.

Which one should you choose?

The only factor you need to consider here is convenience because both processes are legitimate and built to help you out. If you want to go to the garage of your choice, if you have enough emergency cash available, you can choose the reimbursement car insurance claim settlement process.

But, if you cannot save up emergency funds, if you want to avoid the hassle of keeping the bills in check and dealing with the garage while simultaneously bearing the financial and emotional burden, then a cashless claim can be beneficial for you. It’s wise to consider both options before you buy your car insurance policy.

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Team Kotak GIC

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.