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What Does The Policyholder Pay At The Time Of A Car Insurance Claim?

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In car insurance, an exclusion is a provision under the policy that removes the coverage for a specific kind of risk. This actually narrows down the extent of coverage offered under the insurance. Most car insurance policies have a wide range of incidents that are covered. Insurance providers make use of the exclusions clause to carve away the risks that they are not willing to insure.

Why Do Car Insurance Contracts Have Exclusions?

Exclusions in car insurance have various purposes. Most of these fall under one of the following categories:

  1. Catastrophic exclusions - This includes the risks that can affect a large number of people at the same time. So, it poses a great loss to the insurance company. An example of such a risk is nuclear war.
  2. Alternate coverage - These risks are not included under a specific type of auto insurance plan because they are offered under another scheme.
  3. Easily controllable risks - This includes events that can be controlled easily by the policyholder if he/she is careful. For instance, an event like damage to the insured vehicle due to snow or rain is a controllable risk.
  4. Intentional/Non-accidental damages - Intentional damages are always excluded from the coverage of auto insurance.
  5. Wear and tear - From the perspective of the insurance company, it does not make sense to cover unavoidable events like the normal wear and tear of the insured vehicle. This risk can, however, be controlled to a certain extent through proper maintenance of the vehicle.
  6. Illegal activities - If a policyholder uses the insured vehicle for an illegal activity, the damages suffered by the vehicle are not offered insurance coverage.
  7. Insurable with add-ons - These risks are the ones that can be included under the coverage of an auto insurance plan after the payment of extra premium. Some of the add-on covers offered by car insurance companies include engine protect cover, zero depreciation cover, return to invoice cover, etc.

The coverage under car insurance policies are subject to change periodically. So, you should get in touch with the insurance company at the time of policy renewal to check if there have been any updates to the coverage. Otherwise, you may have to bear significant losses at the time you raise a claim.

The Policyholder’s Share:

If you are uninitiated about the coverage under your auto insurance policy, you may be under the impression that you are liable to receive the entire amount you claimed under your policy. However, the truth is that you will always have to bear a certain part of the claim amount, irrespective of the coverage of your plan.

So, what are these charges that you will be bearing? Let us take a closer look:

  • Compulsory deductible - This is a fixed part of the claim amount that you have to bear for each claim that you raise. This amount is dependent on the engine capacity of the vehicle, as shown below:
Engine capacity Compulsory deductible amount
Up to 1,500 cc Rs.1,000
Above 1,500 cc Rs.2,000

The insurance company can charge a higher amount as compulsory deductible if the vehicle is too old. The compulsory deductible factor does not have any impact on the car insurance premium, as the premium amount depends on several other factors such as the make and model of the car, the Insured Declared Value (IDV), etc.

  • Voluntary deductible - This is a deductible that the policyholder opts for at the time of policy purchase. The insured agrees to pay this amount to the insurance company in the event of a claim. This amount is chosen by the policyholder based on the risks associated with the vehicle and his/her affordability.

The voluntary deductible amount is inversely proportional to the premium for car insurance. So, if a policyholder opts for a high voluntary deductible, his/her car insurance premium will be a lower value. Choosing voluntary deductibles is a great way to bring down your premium, provided that you use it wisely.

  • Depreciation - All vehicles reduce in value with age. This is referred to as depreciation. Depreciation is also applicable on vehicle parts. So at the time of a claim, the insurance company will take the depreciation of replaced car parts into consideration and exclude this from the claim payout. In effect, the car owner will have to bear the depreciation amount for replaced car parts.
  • Towing charges - There are specific limits on the towing charges that can be claimed under your car insurance policy. Any amount beyond the cut-off will have to be borne by the policyholder.
  • Consumables - These are substances that are used in vehicles and will be rendered unfit for consumption thereafter. Some examples of consumables are screws, nuts and bolts, grease, distilled water, engine oil, etc. The policyholder will have to pay for the consumables used for repairing the vehicle.
  • Existing damages - Some car owners do not raise claims immediately after a damage has occurred. They wait to file a single claim for the damages accumulated over a period of time. You should be aware that the insurance company may reject such a claim, as the car insurance agreement states that existing damages are not covered. The insurance policy allows you to raise a claim as and when your car suffers a damage. You can also raise multiple claims under car insurance. But do not wait to raise claims for accumulated damages, as this may not be entertained by the insurer.

You can mitigate the effect of some of the above mentioned exclusions by opting for appropriate add-on covers. For instance, the depreciation of car parts can be offered coverage if the policyholder opts for a zero depreciation add-on cover. However, the compulsory deductibles amount will have to be borne by the insured for all claims.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

What Does The Policyholder Pay At The Time Of A Car Insurance Claim? Reviews

Page 1 of 50 1 2 3 4 5
  • Bajaj Allianz Car Insurance
    "Good to Go with Bajaj"
    0.5 4.0/5 "Great!"
    The conditions and the insured which they are providing is good, I have insured Ford Car with Bajaj Allianz, the premium amount is reasonable but they can reduce it. Its 1.5 year old year but still the insurer providing 24 hours service, cash less garages and they have tie up with many centers, the response is great.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • ICICI Lombard Car Insurance
    "Premium should be standard as per market"
    0.5 4.0/5 "Great!"
    I never used the policy if something happen I claim it, I didn't interact with the customer care but I get the reminder message for car renewal. I have insured my maruthi Suzuki riz with ICICI Lombard, The premium is higher but still they are good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 14, 2019
  • HDFC Ergo Car Insurance
    "Very good"
    0.5 5.0/5 "Blown Away!"
    Even my car was insured with HDFC Ergo. It is a second-end car and have chosen the third party insurance. I have not done any claim so far. The premium is reasonable. It offers bumper to bumper facility and road side assistance. The policy period is 2 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 14, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 1
    , tirupur
    Reviewed on Jan 10, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 10, 2019
  • National Insurance Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this Insurance policy for my Maruti Car and i had been paying the premium on an annual basis. The premium amount has not been too high and there has been cash less garages available with this insurance policy. Their customer support has also been helpful at times.
    Was this review helpful? 1
    , pune
    Reviewed on Jan 09, 2019
  • ICICI Lombard Car Insurance
    "Nice Policy"
    0.5 4.0/5 "Great!"
    My car was insured with ICICI Lombard. Last year i have purchased this insurance policy. My wife has referred me about this policy. I pay the premium amount of Rs. 13500. They have given me a convenient IDV value. I had no claim experience so far.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Need to improve the service"
    0.5 3.0/5 "Satisfactory"
    I'm not satisfied with the service provided by new India. I have bought the car insurance policy. They closed their branch on every weekends hence its difficult to renew the policy. I have been paying the premium amount of Rs. 14000 which is a competitive price. They have given the IDV value of Rs. 1.50 lakhs.
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Average Car Insurance"
    0.5 3.0/5 "Satisfactory"
    My car insured with the New India Insurance company. I have been renewing the policy with the same company for 3 years. I have paid the premium amount of Rs. 7000 and they have offered me a satisfied coverage value. The documentation process was fine
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • review Car Insurance
    "Its Good"
    0.5 3.5/5 "Pretty good"
    Last year I had car policy with Bharthi axa whenever I try to renew it ask my poliy no, whenever I mention the same, it shows the its incorrect. If I try to reach the customer care its not reachable. I done the claim, some minor damage back side of the car, they have processing fee 1500. Remaining all taken care by the insurer.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Great Policy"
    0.5 4.0/5 "Great!"
    ICICI Lombard has a good brand value hence i have selected the car insurance policy with this card and the dealer has also recommended about this policy. I pay the premium amount of Rs. 9000 and this is a 100% coverage with bumper to bumper facility. I'm not sure about the IDV value. Its easy to renew the policy.
    Was this review helpful? 2
    , new delhi
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Good"
    0.5 5.0/5 "Blown Away!"
    Previously my car was insured was with ICICI Lombard and it was offered by the showroom. I got a call from the representative for the policy renewal as reminder. I got the insurance paper. I have not done done a claim. It is a comprehensive with zero dep. The premium was high so changed my insurer.
    Was this review helpful? 1
    , mumbai
    Reviewed on Jan 08, 2019
  • Future Generali Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    I have taken a car insurance from Future Generali through online portal. The premium was reasonable and also they have provide bumper to bumper facility. The policy period is one year. There is no interaction between the customer service. I just gave my car for the claim so no experience.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 08, 2019
  • Oriental Insurance Car Insurance
    "Good insurance company"
    0.5 2.0/5 "Expected more"
    Dealer has referred me about this oriental car insurance when i purchase the vehicle. They have rejected the claim since the copy of FIT is not available. They have given me a coverage value upto Rs. 6 lakhs. For the past 3 years i have been renewed the policy with the same company.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Iffco Tokio Car Insurance
    "Good Policy and you can try"
    0.5 4.0/5 "Great!"
    Two months before, i have taken my car insurance policy with Iffco Tokio. Its a PAN India agreement policy for my Maruti Car. I don't remember about the coverage value. This is a zero depreciation policy. I paid the premium amount of Rs. 6500. I have not seen any add on and cashless garage facility.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Its Excellent"
    0.5 4.0/5 "Great!"
    My brother is working with Reliance hence I took my two wheeler policy from this insurance company. I have hyundai accent car, they are providing cash less garages for the damage. I have zero depreciation bumper to bumper policy for the term of one year.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance policy was taken with reliance. The dealer has provided me a policy with this policy. This is a 100% coverage value which covers the bumper to bumper facility, They have given me a IDV value of Rs. 11 lakhs. I pay the premium amount of RS. 33000.
    Was this review helpful? 0
    , thane
    Reviewed on Jan 04, 2019
  • HDFC Ergo Car Insurance
    "Good service provider"
    0.5 4.5/5 "Excellent!"
    The reason to avail HDFC Ergo policy, my banker have suggest this insurer for my car. They gave me the best insured value around Rs. 6 lakhs based on the vehicle age. I have Hyundai I20 car, they are providing 24/7 helpline and cashless service.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 04, 2019
  • ICICI Lombard Car Insurance
    "Good Policy to take"
    0.5 3.0/5 "Satisfactory"
    My car was insured with ICICI Lombard. I pay the premium amount of Rs. 22000 and i have been renewing the policy continuously for 2 years. They have provided me a no claim bonus. Its covered with bumper to bumper facility. My dealer has recommended me about this policy when i purchase a car.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 03, 2019
  • Iffco Tokio Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I have a car insurance with IFFCO TOKYO from last 1 year, there was no claim experience so far with this insurance policy. I pay a premium of Rs 5500 for this car insurance. This is a first party insurance with 0% depreciation and the coverage value is good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 03, 2019
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