Is Cashless Claim Settlement Better than Reimbursement Process in Car Insurance?

Purchasing a motor insurance policy for your car is essential to protect it against unforeseen damages, such as a road accident. IYou can easily claim for the expenses incurred in repairs if you have a valid car insurance policy. In this article, we will tell you about cashless claim settlement & reimbursement claim settlement and which one is better out of the two?

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Types of Car Insurance Claim Settlement

Claim settlement is one of the most important aspects of purchasing a motor insurance policy. With a better claim settlement process, you can get your claim amount without much effort. In the case of car insurance, there are two types of claim settlement process: Cashless claim process and Reimbursement claim process. Let us understand them one by one:

1. Cashless Claim Settlement

In a cashless claim process, you can get your claim settled without having to pay anything from your pocket. Under this process, the insured car should get repaired in an authorized network garage of the insurance company. Once the repairs are done, the insurer will directly pay the claim amount to the network garage and your claim will be settled.

2. Reimbursement Claim Settlement

In case you get your car repaired at a garage that is not authorized by the insurance company, you can claim your repairs under the reimbursement claim process. Under reimbursement claim settlement, the entire claim amount will be reimbursed to you by the insurance company after deducting voluntary and compulsory deductibles.

Process of Claim Initiation: Cashless vs Reimbursement Claim Settlement

Let us understand how you can initiate a claim under the cashless claim process and reimbursement claim process respectively:

Cashless Claim Process

To initiate a claim under the cashless claim settlement process, you can follow these steps:

  • Inform your insurance company about the mishap involving your car.
  • Once the claim has been registered, locate the nearest authorized network garage where your car will be repaired.
  • As soon as the insurance company has inspected your vehicle with the help of a surveyor, the network garage will begin the repairs of the insured car.
  • Once the repairs are made, the network garage will directly send the repair bill to the insurer.
  • The insurance company will settle the claim by paying the entire bill amount to the network garage after deducting the value of depreciation and deductibles.

You May Also Read: Car Insurance Claim Process

Reimbursement Claim Process

When it comes to reimbursement claim settlement, it can be done by following these steps: 

  • Register a claim by informing your insurance company about the mishap.
  • Once you have duly registered the claim, you can take the insured car to the non-network garage where you want to get it repaired.
  • Get your car repaired and pay for all the repair expenses from your pocket.
  • Once the car bill has been paid, make sure to take all the repair estimates, repairs bills, and payment receipts from the garage.
  • To get the reimbursement, you will be required to submit the repair estimates, bills, and other required documents to the insurance company for verification.
  • Once the documents are verified, the insurance company will initiate the reimbursement process and the claim amount will be paid to you.

Cashless vs Reimbursement Claim Settlement – Which is Better?

A cashless car claim process is a better option than a reimbursement claim process. It is not only simple but also more convenient than a reimbursement claim settlement.

With a cashless claim settlement for your car, you don't need to pay anything from your pocket in case of an unanticipated accident. But in the reimbursement claim process, you need to bear all the expenses initially from your pocket, which can pose a financial burden on you. Therefore, a cashless claim settlement process reduces the financial burden on the policyholder as the insurance company settles the repair bill amount directly with the network garage.

Cashless claim settlement is also a hassle-free process as you do not have to submit the repair bills or any other documents that you are otherwise required to submit in case of reimbursement claims. Moreover, it is less time consuming and requires fewer formalities on your part.

Moreover, with cashless claims, you can get your car repaired at the best-authorized network garage of the insurance company. It not only gives quality repair services for your car but also ensures higher customer satisfaction when compared to repairs done in a non-network garage.

Though the cashless claim process for motor insurance is more convenient, the reimbursement claim process cannot be completely ignored. The reimbursement claim process is indeed more time-consuming as you need to collect all the important repair documents from the non-network garage and then apply for reimbursement. However, if you have submitted everything properly, the insurance company will certainly reimburse you the claim amount without much struggle.

But if you compare both these claim models, then cashless claim settlement will be a better option than the reimbursement claim process.

Wrapping Up!

In this fast-paced modern world, where people want to lead a stress-free life, a cashless claim process is an ideal option to claim car insurance. It is not only less cumbersome but also relieves you from paying huge repair expenses from your pocket.

Moreover, cashless claim settlement is offered by every motor insurance company with a wide network of authorized garages all over the country. Thus, it makes the claim settlement process more transparent and easy for a policyholder.

Written By: PolicyBazaar - Updated: 01 April 2022
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