What Are the Reasons to Refrain from Making Car Insurance Claim for Minor Damages?
An unfortunate car accident is when you are reminded about your car insurance policy. Accidents are unpredictable, and no amount of precaution can save you. But things are different when you invest in a robust car insurance policy. You can be free from any financial worries concerning the damages to your car or a third person.
But in some situations, no third person is involved, and you damage your car by accident. For instance, while reversing your vehicle, you hurt the bumper. It will not look great with a cracked bumper, and that’s when a comprehensive car insurance policy comes to the rescue. When you buy such car insurance online, you can make sure the damages to your car are taken care of.
However, it is one instance where you make an insurance claim, but not all damages need to be raised with the insurer. Submitting an insurance claim nullifies any accrued renewal benefits. Here are some reasons why you must avoid minor insurance claims:
1. Impact on no-claim bonus
The primary downside of making an insurance claim for minor damages is losing a no-claim bonus. The no-claim bonus or NCB is the renewal benefit offered in the form of a concession in your insurance premium. With every claim-free policy year, the policyholder accrues such an NCB which lowers the renewal insurance premium. While the amount of NCB starts at 20%, it scales up to 50% of the own-damage premium with consecutive policy tenures without a claim. Thus, any insurance claim ends up annulling such a bonus. *
2. Payment of deductibles
Each insurance claim requires you, the policyholder, to pay the specified deductible in your insurance cover. Deductibles are of two types—mandatory and voluntary deductible. As the name suggests, a compulsory deductible must be paid by all policyholders; a voluntary deductible can be opted for by the policyholder. When you raise a claim for minor repairs, you shall be required to pay for such a deductible as per the policy terms and hence, make not be an intelligent choice to raise an insurance claim. In addition to deductibles, you end up losing your no-claim benefits too. *
3. Evaluating the quantum of loss
An evaluation of the quantum of loss is essential for a claim for a minor repair. The quantum of failure needs to be equated with the deductibles required to be borne in your policy in addition to the benefits given up by way of the no-claim bonus. Equating such loss against these two factors gives you the exact idea of renewal benefits foregone vis-à-vis the insurance benefits received. *
4. Restoration of future premiums
As discussed above, you need to give up the no-claim bonus at the insurance claim time. Such an act restores the car insurance premium to its original amount and thus, increases the burden at the time of car insurance renewal online. Therefore, it is better to evaluate the benefits by availing the insurance coverage compared to the future benefits at renewal. *
* Standard T&C Apply
With these reasons in mind, you must consider the future benefits at every car insurance renewal compared to the current coverage offered by the insurance plan. Alternatively, you can also make use of an NCB protection cover that allows you to make insurance claims a specified number of times before the NCB percentage is nullified. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.