Drawbacks Of Filing Multiple Car Insurance Claims

July 25, 2022August 9, 2022 Sahil

In every person’s life, a car is a significant investment. Legally, you must have a car insurance policy to be able to drive it on Indian roads. Car insurance provides financial security in the event of an accident or theft of your vehicle, in addition to following the letter of the law.

Comprehensive and Third-Party Insurance

What differentiates third-party and comprehensive insurance is the coverage they provide. The main difference between third party car insurance and comprehensive automobile insurance is that the latter only covers third-party damages and losses.

Having a minimum level of third-party liability insurance is required by law. If you don’t have one, you could be fined or possibly have your driving privileges revoked! Knowing the differences between third-party liability insurance and comprehensive car insurance is critical to deciding which is best for you and your vehicle in an accident, collision, flood, or theft.

In case of an accident, you must file a claim with your auto insurance carrier to receive reimbursement for any damage or loss per the chosen policy. Some people mistake filing more than one claim during the policy period. Below we learn more about the ramifications of filing several insurance claims for the same vehicle.

Does car insurance have a claim limit?

The number of claims you can make under your auto insurance coverage is typically unrestricted. It implies that you can file many claims if your vehicle is damaged in an accident.

However, the number of claims you can make under a Zero Depreciation add-on policy may be limited in specific instances, such as when you have this cover. You can only use your Roadside Assistance coverage a particular amount of times during your insurance. As a result, your insurer may include a condition in your policy that limits the times you can file a claim when it comes time for renewal. That’s why it’s critical to read the fine print of your policy, even at renewal.

How many claims on car insurance is too many?

When it comes to how many claims you can file, there is no hard and fast rule. However, before determining whether or not to file a car insurance claim, it is usually advisable for an individual to perform preliminary calculations and remember the essentials.

If the repairs are minor, it is better not to file claims repeatedly, as it might increase your premium while renewing your policy. Moreover, you will also lose your no-claim bonus if eligible.

If you make multiple car insurance claims, what happens next?

You can file as many claims as you like within a policy year, but there are catches here. You should avoid filing several vehicle insurance claims within a policy year for the following reasons:

No-claim bonus

Insurance companies offer a discount on car insurance price on the following year’s premium to policyholders who maintain a claim-free record for the current policy year. The National Claims Bonus (NCB) grows from 20% to 50% after five consecutive years without a claim. NCB rewards can be squandered if you file a claim in the interim. As a result, you should only file a car insurance claim if the repair bill exceeds the NCB discount.

Premium rise

If you file many automobile insurance claims in a policy year, the insurance company may boost your premiums at renewal time if you have a history of filing multiple claims. As a result of various claims in one year, your insurance provider may raise your premiums to compensate for the additional risk you pose.

Covering depreciation

When a claim is settled, the insurance company must pay the claimant without taking the depreciation rate into account if the person has purchased a zero-depreciation add-on cover for their car insurance policy. This zero-depreciation cover does have some restrictions on the number of claims you can make in a year.

Amount Deducted

Car insurance claims should be avoided if the repair costs are lower or greater than the deductible amount indicated in your policy paperwork. A deductible component in your automobile insurance policy may limit how much compensation you receive even after filing a claim.

Can I buy a multi-car policy?

Instead of having separate policies for each car, car insurance or motor floater policies cover multiple vehicles under one policy. Even though the cars are insured under the same policy, they can have different levels of coverage. Each car can have its specific excesses and additional coverage.

In conclusion

Making an insurance claim for a damaged vehicle is now an easy process thanks to growing digital penetration and the advent of cashless claims.

In the event of a tragic accident, auto insurance provides financial security against unanticipated financial obligations. It is possible to file any claims within the policy time, but this comes with drawbacks that, if not used carefully, can result in more significant losses than financial benefits. Always study the fine print of your auto insurance contract and file claims only when necessary.