To Claim or Not to Claim : Making informed decisions with your Car Insurance .

Gaurav Arora - Chief - Underwriting & Claims Property & Casualty, ICICI Lombard (1)

Is it true that you should not file claims for small car damages because even though the amount may be   small, it would add to your number of claims filed?

Mr. Gaurav Arora – Chief – Underwriting & Claims Property & Casualty, ICICI Lombard GIC Ltd.


Customer/Insured should be aware of three important conditions in motor insurance such as Excess/Deductible at the point of claim, Benefit of NO Claim Bonus (NCB) and number of claims you file during the policy tenure.

For every claim paid by the insurer there is a compulsory deductible which you must bear as per IRDAI regulation. This deductible amount may vary from vehicle to vehicle and for Private Car this may range from Rs.1000 to 2000. Further, if you avail any claim during the policy tenure the No Claim Bonus becomes NIL and at the point of renewal you will lose a significant amount of premium discount in the coming years. Additionally, during the renewal of your policy, the insurer also checks the number of claims taken in the previous insurance and the renewal premium may be loaded further. Keeping in mind these three conditions, it is advisable to avoid claiming small value repairs.

●       Is there a maximum limit to the number of insurance claims that one can file in a year (ranging across insurance companies)?


No, there is no cap on maximum claims limit that one can file in a year in motor insurance across all insurance companies in India

●       When it comes to add-ons such as zero depreciation, engine protect or even others, is there a limit to the number of claims that you can file in a year? Are the number of claims under the add-on features counted separately from those under the base plan?


Though the number of claims that can be made under the base policy is not restricted, for availing Zero depreciation benefit, the number of claims allowed may vary from insurer to insurer. Claim under base and add-ons are considered as same claim.

●       Should you avoid filing a claim unless the car repair cost exceeds say xx amount? I understand this may vary depending on the car, but still- would it be ok to, for example, file a claim only if the repair cost exceeds say Rs 25,000?


If you are getting benefited from the deductible and No Claim Bonus for not filing a claim, you should avoid taking low value claims.

For Eg: (Values in rupees)

Claim Amount: 6000

No Claim bonus in the renewal if you don’t claim: 3500

Compulsory Deductible applied by insurer if you claim: 2000

Since in this scenario you are getting a No Claim Bonus of 3500, it’s going to benefit you if you don’t not claim as you can protect your No Claim bonus.

●       Does filing more claims mean your insurance premium will be higher next year?


Yes, the NCB benefit would be lost and based on claim experience the premium amount may also increase.

●       If you decide to renew your car insurance policy with a different insurance company, will their decision on whether to give you a policy and the premium amount depend on your past claims record (number and amount you have filed in the earlier years)? Please explain specifically how your claims record can affect your renewal with another insurer.


As stated above, the NCB benefit would be lost, and the insurer may evaluate the risk at individual level and charge premium as per the claim experience and number of claims taken from the previous insurer.

●       NCB – what is the usual discount % that you get on your premium if you don’t file any claim in the preceding year? Does this discount apply on the overall premium amount? Do you have to contact the insurer for this discount or is it automatically applied when you renew your policy?


If you don’t claim in first year then the No Claim Bonus will be 20%. It increases to 25% in the second year, 35% in the third year, 45% in the fourth year and 50% in the fifth year. One can earn a maximum No Claim Bonus of 50% for five continuous claim free years.

No Claim Bonus is automatically provided to Insured based on Claim status of previous years.

●       Do you think it matters whether your car is old or new (IDV will be lower in the first case) – should someone with an older car be more careful about filing too many claims?


Whether the vehicle is new or old one should be aware about the three conditions mentioned in above. The insurer may evaluate the risk at individual level and charge premium as per the claim experience and number of claims taken from the previous insurer.

IDV will be considered for settlement of claim only in case of total loss or theft. IDV will be paid if the claim is assessed as total loss or theft.

Leave a Reply

Your email address will not be published. Required fields are marked *