Why You Can't Claim Car Insurance Immediately After Theft?
Everyone buys car insurance, but very few people are aware of the complexities involved.
Read more
Why Car Insurance Claims for Theft Take Time?
If you believe that when your car is stolen, you just need to file a Police FIR, submit it to your insurance company, and you will receive the claim money. Well, it's not true. Let's understand why insurers do not settle vehicle theft claims immediately after the incident.
-
Police Verification
When your car gets stolen, the insurer wants a copy of the FIR before handling your claim. Police authorities conduct a thorough investigation, which may take time.
-
Waiting Period
Insurance companies wait for a given duration of time (mostly 180 days) to confirm that the vehicle is not retrievable, as most vehicles are recovered within weeks of being stolen.
-
Insurer Investigation
Besides police verification, insurers conduct their own investigation to cross-check the last usage of the vehicle, anti-theft devices installed, and any negligence from the owner.
-
RTO Approval
For theft claims, a No Trace Certificate from the police and ownership clearance from the Regional Transport Office (RTO) are required before the insurer releases compensation.
After 180 days, the person whose car was stolen must submit a copy of the FIR and the police report to the insurance company. This waiting period is why you can't claim car insurance immediately after a car theft.
Documents Required for Stolen Car Insurance Claim
Besides the Police FIR and non-traceable report, the car owner must also submit:
- Car insurance policy copy
- Driver's license
- PAN and aadhaar card
- Both original car keys
If someone has one key and the other is lost, but the car owner has not filed a police report regarding the lost key, you will be held responsible and will not receive the insurance money. This means that if you ever lose your car keys, immediately report them to the police and keep the report safe. Because if the car gets stolen, you will also have to report the lost keys.
Also Read: Stolen Car Insurance Claim Process: Step by Step Guide
Car Theft Insurance When the Vehicle is on Loan
If the stolen car is on loan, two people receive the money. First, the bank will receive the loan amount, and second, the person whose car was stolen will receive the money.
But, it's important to understand the IDV (Insured Declared Value) mentioned in your car insurance policy. It is the amount that is paid to the car owner in the event of the car theft, fire, or otherwise unrepairable.
Importance of IDV in Stolen Car Insurance Claim
If your car's IDV is higher than the loan amount, the car insurance company will pay the loan amount to the bank from your IDV. If there is a remaining IDV amount after the loan payment, the car owner will receive it.
However, there's another scenario where your car's IDV value is lower than the loan amount. In this case, the insurer will pay your entire IDV to the bank as the loan amount. If there is still a remaining loan amount, the car owner will have to pay the bank out of their own pocket. In this case, the vehicle owner will not receive any money from the insurer.
How to Avoid Delays in Car Theft Insurance Claim Settlement?
Here are some tips you can follow to avoid any delay in the claim settlement of your stolen car insurance:
- Install anti-theft devices (ARAI-certified) in your car.
- Ensure timely car insurance renewal to avoid coverage lapse.
- Maintain documents, such as your car insurance, vehicle registration certificate, driving license, etc.
- File the FIR and inform your insurer immediately after theft.
In a Nutshell
While it is a burden to deal with a stolen vehicle, understanding the car theft insurance claim process is more important. Do not forget to report the theft quickly and submit the necessary documents to your insurer. Although the whole claim process can take a few months, by taking the right steps, the claim will be settled sooner.
