Car Insurance means legal protection given by the insurance company to the policyholders. There are two parties involved in this agreement i.e. the policyholder and the insurer.
We all know that is future is unpredictable and it is better to hope for the best and prepare yourself for the worst. For sure, we can’t change the future. We can make efforts from our end to ensure that nothing goes wrong.
Road accidents happen every day, we read about accidents daily in newspapers and we feel bad about it. So to be on a safe side insurance protects us from the damages.
Mr. Kumar bought a brand new Ford and he was ecstatic for obvious reasons. He purchased comprehensive car insurance immediately to safeguard his car and be sure for the future. After 3 months, his car met with an accident. He was safe but the car was severely damaged. He was disheartened to see his car in that condition but he was grateful to the almighty that he was perfectly fine. Also, he was comforted by his friends and families that he had a comprehensive insurance cover for his car so he won’t have to bear the repair cost from his own pocket.
He made a discussion with his office friends regarding the comprehensive claim he had but he was in a state of confusion. He wasn’t pleased by the outcome of the discussion because he was suggested by his friends to bear expenses from his own pocket as the damages were not severe, he was advised to not to file for the claim because the repair cost was not too high.
As an insured person, Mr. Kumar had second thoughts about it. He had all the rights to file the claim. After all, that was one of the major reasons that he bought the automobile insurance in the first place. He was tensed about the drawbacks of filing the claim and its consequences.
Mr. Kumar was not alone who faced this dilemma. Most of the people feel just like him when it comes to file a small claim. Is it worth it to file a small claim? Read on to find out.
When it comes to filing small claims, it is all about calculations. Calculate the cost that you would have to pay and compare it with NCB that you will get if you don’t file for the claim. On the basis of the comparison, decide whether it is a smart move to file the claim or not.
The amount of deductible expenses is specified at the time of buying a policy. It is that portion of the claim amount which the policyholder has to bear from his own pocket. When it comes to file a claim, the deductible expenses, depreciation etc. are deducted from the total amount and then the remaining balance is payable. It is not that mandatory to file a claim that sums up more or less, close to the deductible expenses.
Your NCB is affected
No claim bonus is a bonus opportunity given to the policyholders by the insurer at the time of renewal of the policy if no claim has been filed by them. Initially, the NCB is fixed as 20 percent and it hikes consistently if the policyholder doesn’t file any claim. Even if only one claim is filed, the NCB becomes zero which means no discount is given. This is the reason why people refrain from filing a small claim.
For instance, if your car insurance policy’s deductible expense is Rs. 2000 and the No Claim Bonus discount is Rs. 6000 and if you file a claim of Rs. 4000, you will have to pay your share of Rs. 2000. At the same time, your NCB of Rs. 6000 will slip away from your hands.
If we think financially, small claims should be avoided because you end up losing your money. Even in this particular scenario, you will get a claim worth Rs. 4000 at the same time; you will lose Rs. 2000 since your NCB is Rs. 6000. It is advised to make a claim only when the claim amount is large. Because in that case, what you will spend will be more than what you will get. That justifies having a car insurance coverage.
Experts say that filing frequent claims will affect your claim history. If you wanna reap the maximum benefits from your four-wheeler insurance, you should avoid filing for minor repair damages like dents and file for a claim for a major repair like the damaged engine.’