A car is an important investment in any person’s life. As a vehicle owner, you have to insure your vehicle and fulfill the legal requirements. In addition to meeting legal requirements, a car insurance plan provides you with financial support should your vehicle be damaged. The process of notifying the insurer for compensation for vehicle damage is called a compensation lawsuit. So how many claims are allowed on a car insurance policy in India?
In general, there is no restriction on the number of claims you can make under the motor insurance policy in a year. However, it should be noted that the car insurance claim affects the NCB (No Claim Bonus). Repeated claims within a year can also increase your premium when you renew the policy.
But suppose you choose add-ons like Zero Depreciation coverage for your car insurance plan, there may be restrictions on the number of claims you can make in a year under Zero Depreciation insurance. The number of claims allowed under this coverage varies from one insurer to another.
How many car insurance claims are too many?
There is no specific answer to this question. It depends on the type of claim and the extent of the damage done to the vehicle. However, it is recommended not to make a claim if the damage is minor. Examples of minor damage include a dent in the bumper or a broken mirror. Only make a claim on car insurance if the damage is serious.
What happens if you make more than one car insurance compensation?
While there is no limit to the number of motor claims you can make, you should be careful when suing motor insurance. Here are reasons to avoid filing multiple claims in one year:
- No Claim Bonus
The NCB or No Claim Bonus is a concession on the premium you earned for not making a claim during the previous policy period. The discount percentage increases with each consecutive year you do not make a claim. If you make zero claims for 5 consecutive years, the discount can go up to 50%. So, if you make a claim, you forfeit the NCB benefits. Only file a car insurance claim if the repair cost is higher than you can manage to pay.
- Premium increase
If you make more than one claim against automobile insurance, the insurer may increase the premium when you renew the policy. Multiple claims mean you pose a higher risk to the insurance provider, and to cover this, the insurer may increase the policy’s premium.
- Zero depreciation limit
If you purchased Zero Depreciation coverage for your car insurance policy, the insurance company will not consider the depreciation rate when covering claims. However, there may be a limit to the number of claims you can make in one year under this coverage. This applies to all forms of motor insurance like car insurance and bike insurance among other types.
- Deductibles
If the repair cost is lower or slightly higher than the exemption stated on your policy document, it is better not to claim. Even if you make a claim, you will receive insufficient compensation due to the deductible component.
Now you know that there are no restrictions on the number of annual car insurance claims. However, this does not mean that it is appropriate to file more than one claim. It is better to avoid making a claim for minor damage or if the repair cost is less than NCB or equal to the deductible. The main disadvantage of making multiple claims is the loss of NCB and the increase in insurance premium.
However, if the damage to your vehicle is severe, the first thing you should do is to inform the insurer and file a claim for compensation with the relevant documents. You can easily make a claim online through your motor insurance app and it only takes a few minutes. Finally, be careful when filing a claim, consider all the factors associated.
