When Mr. Kumar bought a brand new Ford, he was ecstatic for obvious reasons. He bought comprehensive car insurance to safeguard his car. After 3 months, his car met with an accident. He was safe but the car was severely damaged. He was a little disheartened to see his car in that condition but he was grateful to the almighty that nothing happened to him. Also, he was comforted that he has a comprehensive insurance cover for his car so he won’t have to bear the repair cost from his own pocket.
After a discussion with his office friends regarding the claim, he was in a state of confusion. He wasn’t pleased by the outcome of the discussion as he was suggested to bear expenses from his own pocket. The damages were not severe; he was advised not to file for the claim because the repair cost was not that much.
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 for deductible expenses is specified at the time of buying a policy. It is a portion of the claim amount that the policyholder has to bear from his own pocket. When it comes to file a claim, the deductible expenses, depreciation etc. is subtracted from the total amount and then the remaining balance is payable.
It is not that necessary to file a claim that sums up more or less, close to the deductible expenses.
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No claim bonus is a bonus referred as a discount that is given to the policyholder by the insurer at the time of renewal of the policy if no claim has been filed. The NCB is set as 20 percent initially and it hikes consistently if you don’t file any claim. In case only one claim is filed, the NCB becomes zero. This is the reason why you should refrain from filing a small claim.
For instance, your car insurance policy’s deductible is Rs. 2000 and the NCB discount is Rs. 6000. 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.
Financially speaking, small claims are avoided because you end up losing your money. Even in this particular scenario, your will get a claim worth Rs. 4000 at the same time; you will lose Rs. 2000 since your NCB is Rs. 6000. Make a claim only when the claim amount is large. In that case, what you spend will be more than what you will get. That justifies having a car insurance coverage.
As per experts, filing frequent claims affects your claim history. To reap the maximum benefits of your four wheeler insurance, avoid filling for minor repair damages like dents and file for a claim in major repair like damaged engine.
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