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What Comes Out of Your Pocket When Claiming for Car Insurance

When it comes to car insurance, many consumers face an issue at the time of making a claim because of the very many miscommunications and misunderstandings involved. The biggest being the assumption that once insurance is bought all charges in case of an accident will be borne by the insurance company. The fact is, irrespective of the plan, there will always be a charge that will have to be borne by a consumer at the time of a claim.

Firstly, it must be noted that a motor insurance policy does not covers normal wear and tear and general ageing of the vehicle, depreciation or any consequential loss and mechanical or electrical breakdown. Based on this, let us understand the different charges that are applicable at the time of claim.

Compulsory Deductible
This is the amount a consumer has to pay for each claim filed. This amount depends on the cubic capacity of the vehicle and is charged as follows:

S.No Cubic Capacity Compulsory Deductible
1 < 1500 Rs. 1000
2 >= 1500 Rs. 2000


Depreciation: When a claim is filed, the age of the car is taken into consideration. We understand that the value of a car and its parts reduces as it ages which is referred as depreciation. The depreciation amount for the parts being replaced needs to be borne by a consumer.

Consumables: In addition to part being replaced there are car consumables which are taken into account. These are items or substances of specific purpose which at the time of loss are either totally used or rendered unfit for further consumption. Nuts and bolts, screw, washers, grease, lubricants clip, ac gas, bearings, distilled water, engine oil, oil filter, fuel filter, break oil and the like. If your insurance policy doesn’t specifically cover this, you will need to bear the cost for the same.

Towing Charges: The towing charge which can be claimed is limited to Rs 1500/- in most insurance policies. Any amount incurred beyond this is payable by the consumer.

Claim for existing damages: Many a times consumer makes a mistake of not claiming at the time of accident and wait for multiple accidents to happen, latter filing a single claim. As per the rules, the insurance company is liable to cover damages which occurred as a result of a single accident. However, you can claim your car insurance multiple times.

An important aspect to discuss when talking about charges in car insurance is the Voluntary Excess (VE). This is the amount that the customer has to pay in addition to the compulsory deductible at time of claim. For e.g. If you have opted for Rs 15,000 as VE, then for each and every claim up to Rs 15,000 customer has to bear the expenses.

Taking Voluntary Excess clause in your insurance policy reduces your premium amount. This is because it puts some of the risk on a consumer, thereby reducing the liability on an insurance company. Many times insurance sellers add this amount to a policy without informing a customer which creates a disparity in premium prices for the same car insurance policy.

The various options available for Voluntary Excess are:


VE Discount




20% on OD premium subject to max Rs 750/-



25% on OD premium subject to a max of Rs 1500/-



30% on OD premium subject to a max of Rs 2000/-



35% on OD premium subject to a max of Rs 2500/-


Finally, any discussion about car insurance claim is incomplete without talking about No Claim Bonus (NCB). This is the discount a consumer is eligible for because they have not made a claim on their car insurance policy in the previous year. The best part is that this discount is available even if you change the insurer.

A lot of people think they can outsmart insurance companies and get NCB by not disclosing claims made while changing insurance companies. This never works because at the time of claim all the discounts availed and the information shared is validated.

An insurance company will have all the updated information whether you choose to share it or not. Remember, if the information is found to be falsified the company has the right to reject the entire claim.