Beginner’s Guide to Cashless Car Insurance Policy in India

Gone are the days when you would spend days waiting to claim reimbursement from the insurance company for expenses incurred on damage to your vehicle covered under the insurance policy.

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Cashless claims are gradually gaining popularity amidst growing digital adoption and the need of the hour for quick, hassle-free, and on-spot claims, ensuring reduced financial stress on the insured.

What is a Cashless Car Insurance Policy?

A cashless claim for allows you to claim your cover and get all the monetary benefits without spending anything out of your pocket at the time of paying bills. The insurance company takes care of directly settling the amount with the service provider.

As cashless claims start gaining popularity, insurance companies have begun introducing them in motor insurance plans as well.

Under the cashless car insurance facility, all the benefits of your car insurance can be availed without having to pay the cost of repairs or medical injuries involved in an unfortunate accident. All the expenses and bills are directly borne by the insurance company.

Difference between Cashless Claim and Reimbursement Claim

 

REIMBURSEMENT CAR CLAIM

CASHLESS CAR CLAIM

Expenses Incurred

All expenses are first incurred by you and then sent for reimbursement

The insurer directly settles the bills with the garage

Claim Process

Documents & bills are first verified by the insurance company adding an extra step in the process.

No such step is required as the insurer bears all the costs making it an extremely easy, quick, and hassle-free process.

Network Garages

The reimbursement amount can be claimed at any garage across the nation

Cashless repairs can only be claimed at the insurer’s partner garages network

Cashless Claim Settlement: How Does It Work?

Your insurance provider has tie-ups with several partner garages and other service providers across the nation. Such service providers are authorized by the Insurance Company and are a part of their network garages.

These network garages have an agreement with the insurance company to provide you cashless repair services at the time of claiming damages due to an accident. Here is how you can effortlessly make a cashless car insurance claim:

  • In the case of an unfortunate accident, you need to locate the nearest network garage of the insurer
  • As the insurer is intimated, the network garage will begin repairs for your cars as well as the process of the cashless claim settlement.
  • Once the repairs are made, the bill is directly sent to the insurance company from the network garage
  • The entire bill will be borne by the insurer except for some deductible costs as well as the depreciation cost

Is it Completely Cashless?

While the entire cost of your repair is paid by the Insurance Company, you need to keep in mind that still a small amount of the bill has to be paid by you. This includes:

  • Deductibles: The least deductible amount would be defined in your policy and would be borne by you in the unfortunate incident of an accident. The compulsory amount to be deducted is pre-defined by the Insurance Regulatory and Development Authority of India (IRDAI) based on the capacity of the engine. However, this amount does not have an impact on your motor insurance premium.
  • Depreciation cost of parts that are replaced: Damaged parts carry a certain percentage of depreciation with them and this cost increases as the vehicle gets older in life years. The maximum amount can be 50% and would have to be borne by you.
  • Consumables: These included lubricants, engine oil, and other equipment consumed during the repair of the vehicle, and the same would be borne by you.

While the cost of deductibles and the consumables can't be avoided, the cost of depreciation incurred on the replacement of parts can be avoided by you in case you opt for a zero-depreciation add-on for your vehicle.

Cashless Car Insurance Claims - The Need of the Hour

  • Transparent: The bills and estimates of repairs required to be made on the vehicle are sent to the insurance company at the beginning before the work is begun. The surveyor from the insurance company is involved in the process from the beginning, hence, both the insured and the insurer are ensured of genuine estimates by the network garage. This entire process makes car claim settlement extremely transparent.
  • Speedy Claims: The surveyor from the insurance company gets involved in the process as soon as the mishap occurs and the company is informed. This makes the entire process to be sped up as the surveyor sends the bills to the insurance company immediately as repairs can’t begin until approvals are made.
  • Hassle-free Process: Cashless claims do not have any formalities involved as it is in the case of reimbursement claims where you would need to submit the supporting documents as well as the reimbursement form which makes it a big hassle. Cashless claims are growing to be better suited to the modern fast-paced era.
  • Extremely Convenient: With cashless claims, you would not need to pay for the sudden expenses for the damages incurred to your car except for the deductibles and depreciation. This makes it extremely convenient as all the heavyweight is lifted by the insurance company for you in terms of the financial burden
  • Quality Service Provided: In such a highly competitive business environment, Insurance Companies tie-up with the best in class garages so that not only do you get faster claims but also quality service for your car. This ensures higher customer satisfaction.

Conclusion

It is certainly the need of the hour to opt for cashless claims as a preferred choice over reimbursement claims nowadays.

Cashless car insurance is here to not only make your life easy but improve and expedite the entire process of claiming car insurance. The process has now become transparent, simpler, and extremely convenient for both the insurer and the insured.

With the growing popularity, a cashless claim is now offered by almost all Insurance Companies. Make sure you comprehensively compare and buy the best cashless car insurance policy online for your vehicle for a hassle-free claim process.

Written By: PolicyBazaar - Updated: 09 September 2021
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