Buying a car is a significant investment in an individual’s life, second only to the purchase of a home. For those who love their wheels, making sure that it is well maintained is also of prime importance. Another very important aspect is car insurance which secures your drives and safeguards your savings in case of unexpected expenses arising from an accident or other damages.
With the increase in traffic and the bad condition of roads in many places, it takes a lot to avoid accidents or other damage to your car. At such times, it is important to use your discretion about the incidents if you would like to raise a claim.
Although there is no limit to the number of claims you can raise for your car in the policy year, there are some things to keep in mind about raising multiple claims and how it can affect you.
How Many Claims Are Allowed In A Car Insurance Policy In A Year?
In general, there are no restrictions on the number of times you can file a claim under a car insurance policy. However, you must keep in mind that claims negatively affect your No Claim Bonus (NCB). Moreover, repeated claims in a year may result in increased premiums when you renew your insurance policy.
However, if you have opted for a zero depreciation cover for your car insurance then there can be restrictions on the number of claims you file in a year. The number of claims allowed under this cover varies from insurer to insurer.
Having said that, it is better you raise a claim only when there is any major damage to your vehicle. In case of minor damages, try to bear those expenses on your own.
Repercussions Of Filing Multiple Claims In A Car Insurance Policy
As mentioned earlier, there are no limits on the number of claims you can file, you should still be mindful when filing a claim against motor insurance. Here are some things that you must know in order to use your discretion when filing a claim.
- Loss of No Claim Bonus (NCB): NCB is the discount on the premium you earn for making no claims during the previous policy period. The percentage of discount increases with every consecutive claim-free year. The discount can go up to 50% if you file zero claims for 5 consecutive years. So, chances are, if you make multiple claims, you will lose out on the NCB benefits. It is advised you make a car insurance claim only when the cost of repair is higher than the NCB discount.
- Increase in Premium: If you raise multiple claims, the insurer may increase the premium amount when you renew the policy. This happens because multiple claims mean that you pose a higher risk to the insurance provider, so to cover that, the insurer might increase the premium of your policy.
- Zero Depreciation Limit: If you have purchased a zero-depreciation add-on cover along with your car insurance, the insurer will not consider the depreciation rate when settling claims. But then there may be a limit on the number of times you can make a claim in a year.
- Deductibles: A deductible is a fixed percentage of the claim amount that the policyholder will need to bear. So it is wise not to file a claim if the repair cost is lower or just slightly higher than the deductible mentioned in your policy document. In case you do, the compensation you will receive will be inadequate due to the deductible component.
Now that you know the repercussions of filing multiple claims in a policy year, we are sure you will be mindful of raising claims. However, do remember that taking insurance and renewing it timely to keep your coverage intact is extremely important. If you wish to explore car insurance plans from some of the top insurers in India, be sure to check out Bajaj Finserv.
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