How Many Claim Are Allowed In Car Insurance In A Year?

With the increase in population and income of people, the number of vehicles on the road has also gone up significantly. However, the level of road safety has deteriorated. The number of accidents occurring daily has become more significant. The severity of accidents is more than times before, and the death rate with regards to road accidents has also gone up. This all indicates that we indeed need to drive carefully, but it also raises some critical points in relation to car insurance. Multiple points are to be taken care of while buying and claiming the amount under car insurance, but here we are addressing one frequently asked query that is there any limit on how many times can car insurance be claimed?

How many claims are allowed in car insurance?

The Insurance Regulatory and Development Authority of India (IRDAI) does not place a limit on the number of times you can raise an insurance claim. So, any number of claims can be made with your insurer, and they shall be honored if valid. However, it isn’t advisable to make frequent insurance claims, especially for minor repairs. Doing so impacts the no-claim bonus, which is an additional benefit that helps to lower the burden of the premium. For instance, a minor repair for damages to your bumper or a broken mirror isn’t a smart choice. Making claims only for a significant value of damages is worthwhile.

Why do people advise not to claim insurance under certain circumstances?

Firstly, ‘No Claim Bonus’ is directly affected once you claim anything under your car insurance. No Claim Bonus is the discount you get on the premium to be paid in the following year if you don’t claim anything under the given policy in the previous year. This ranges anywhere from 20% to 50% depending upon how long you have not put forward any claim. Now, if you put forward any claim, you have to start again, and all the accumulated discount for years is gone in a shot. Frequent claims also affect the credibility of the customer and affect the premium to be paid in the following years. Repeated claims can make the renewal of policy more expensive. It shall also be kept in mind that it is better to make a claim when the cost of repairing is too high.

What is the impact of making multiple car insurance claims?

As discussed above, there is no limit on how many claims can be raised, but it is judicious to be aware of the times you raise one. Here are some reasons why making frequent claims can have an adverse impact:

1. Loss of NCB benefits

No-claim bonus or NCB is the benefit that the insurance companies offer when a claim hasn’t been made. The bonus is available in the form of a markdown in renewal premiums. The percentage of such a markdown starts at 20% of the own-damage premium and scales up to 50% at the end of the 5th year with each consecutive claim-free policy period. So, when you raise an insurance claim, this amount of renewal benefit nullifies to zero. Please visit the official website of IRDAI for further details.

2. Restoration of the premium amount

Another downside of making frequent insurance claims is your comprehensive car insurance premium being restored to its original amount. While the NCB gets nullified, your premium is restored to its original amount, requiring you to pay more than what you would otherwise.

3. Limitations in case of zero-depreciation covers

If you have a zero-depreciation add-on loaded on your standard insurance plan, the policy also provides coverage for any depreciation on the spares during its replacement. Since these add-ons are in addition to the standard policy cover, their terms are defined by the insurance company. Hence, these terms may specify a limit on how many times such an amount of depreciation cover may be provided in the insurance claim.

4. Out-of-pocket expenses: Deductibles

When you make an insurance claim, a deductible is something that you need to pay from your pocket. This amount of deductible is further divided into two categories—mandatory and voluntary. Since the mandatory deductible is specified by the IRDAI, and the voluntary deductible is specified in your policy terms, you need to account for such an amount that needs to be paid at the time of raising a claim.

What if Multiple Car Insurance Claims are Made?

As discussed above, as such there are no limits on the claim number. Yet, it is better to be mindful when it comes to filing a motor insurance claim. Here we have enlisted some key reasons that would enable us to understand that multiple car insurance claims should not be filed:

1. Increase in Car Insurance Premium: For anyone who files multiple claims in a year, the insurance company is likely to increase the premium while car insurance renewal. Multiple claims imply that the individual poses a high risk to the insurer. To cover it the insurer is likely to increase the car insurance premium.
2. No Claim Bonus: The No Claim Bonus is essentially a discount on the premiums earned when making no claims during the last policy term. The discount percentage increases with each consecutive claim-free year. If you file no car insurance claims for five years, this discount can easily go up to 50%. It means that if you make a car insurance claim, you will lose the status of NCB. A good way is to have an understanding of the repair cost for the incurred damage. Claim only if the repair costs are higher than the NCB discount.
3. Deductibles: When the repair costs are low or merely high than the mentioned deductible in the policy schedule, do not file a claim. In case you file a car insurance claim, insufficient compensation will be received because of the deductible aspect.

How to decide when not to make claims?

Well, we know that there is no bar on how many times car insurance can be claimed; we need to know that when we should not make a claim. So here are the circumstances when it is advisable not to make a claim

• When ‘No Claim Bonus’ is more than repair cost: When the amount of succeeding no claim bonus receivable on insurance premium is more than the repair expense on the car, it is advisable to not claim anything under the insurance policy.
• When repair amount is not more than deductible: Deductible is the portion of claim amount payable by you whenever you claim insurance. If the amount payable by you doesn’t exceed the deductible, you won’t get anything from the insurance company.

So why miss on the benefits of not making a claim when you are not benefited from anything by making a claim? Also, it should be kept in mind that if you are claiming an amount under one claim but the amount related to two separate events, then the deductible shall apply separately on both events.

• When a third party can pay your expenses: There are times when the other person you met with an accident is liable to pay you the damages suffered. So take benefit of that and spare your insurance for some additional time.

So, all in all, we can say that it is necessary to assess the quantum of loss suffered, applicable limits of deductible, any possible impact on ‘No Claim Bonus’ and then only make a claim. While this assessment is a deciding factor, it is important to be wary of how to claim car insurance when needed.

Does the filing of claims mean I will have to pay more premiums in the following years?

Many factors contribute in deciding what is the insurance premium amount for your policy. It ranges from the changes in IDV, i.e., Insured Declared Value, general levels of premium amount, nature of the claim as to whether the claim was filed due to mistake of the policyholder or third-party, and some other factors. So there is no direct relation as such between the number of claims and insurance premium.

FAQs

Is there any time limit within which the insurance claim has to be submitted?

No, there is no time limit to submit the claim, but it is advisable to do it at the earliest possible, so the insurance company does not deny the claim making this the basis of the denial.

“I have claimed once under car insurance, but my IDV is not exhausted. Can I claim once again under the same policy?” asked Razia

There is no limit on how many claims are allowed in car insurance, provided it is within the IDV. Hence you can claim the amount under the same policy.

What is the maximum number of claims allowed over a year?

There is no specific limit on the number of claims allowed, but excessive claims may affect your No Claim Bonus (NCB) and could impact policy renewal terms.

Is there a limit on car accident claims?

While most policies don’t set a cap on the number of accident claims, frequent claims may result in higher premiums or stricter terms during policy renewal.

How many claims are allowed in a year?

You can file multiple claims in a year as per your policy terms, but repeated claims may affect your benefits, such as the No Claim Bonus (NCB).