Car Insurance Claim Rules: Timelines, Deductibles and NCB

Knowing the car insurance claim rules before an accident saves money and arguments later. This guide covers the deductible, depreciation, claim timelines and no claim bonus, based on a summary of IRDAI rules from insurer Zurich Kotak.

Also, many owners only read their policy after a claim goes wrong. A few minutes now can tell you what will be paid, what will be cut. Then, What to ask the insurer.

Car insurance claim rules for cover types

Third party cover is compulsory, and driving without it is an offence under Section 196 of the Motor Vehicles Act. However, Property damage to a third party is capped at Rs 7.5 lakh. The compulsory owner driver personal accident cover is Rs 15 lakh. Still, a new private car needs three years of third party cover upfront.

Comprehensive cover is optional. Next, it adds protection for your own car. Own damage cover can be bought one year at a time. So its expiry date can differ from the third party cover.

Deductibles and depreciation in a claim

Every own damage claim carries a compulsory deductible. Also, it is Rs 1,000 for private cars up to 1,500 cc and Rs 2,000 for larger engines. You pay this amount first, so a small dent may not be worth claiming.

Then, Depreciation works differently for repairs and for total loss. For theft or total loss, the insured value is reduced by 5 percent at up to six months, rising to 50 percent at four to five years. However, for repairs, parts are reduced by 40 percent at five to ten years and 50 percent beyond ten. Plastics, tyres, batteries and airbags are cut 50 percent at any age, while glass is not.

Still, a car is treated as a constructive total loss once repair and recovery costs pass 75 percent of the insured value. For example, on an insured value of Rs 4,00,000, the threshold is Rs 3,00,000.

Claim timelines under the car insurance claim rules

Next, the assessor’s report is due within 15 days of the assessor’s appointment. The insurer must then decide the claim within 7 days of receiving the report. So, a Rs 500 a day charge can apply when the report is late. But only in the cases listed in the circular. So note the date the assessor was appointed and the date the report reached the insurer.

The one hour cashless authorisation that exists for health insurance does not apply to motor policies. Then, Cashless repair depends on the insurer’s garage arrangements and your policy terms.

How no claim bonus works

The own damage discount rises with each claim free year: 20 percent after one, 25 after two, 35 after three, 45 after four. However, 50 percent after five or more. The bonus belongs to you, not the car. Still, it can move to a new insurer or a new car with a certificate from the previous insurer.

It survives a renewal gap of up to 90 days. Next, After that it drops to zero, and the insurer may ask for an inspection before cover resumes. GST on premiums is 18 percent.

Common mistakes to avoid

So, Do not let cover lapse beyond 90 days. Do not assume cashless is guaranteed. Also keep your documents ready, since a valid PUC certificate matters on the road, as we explain in our PUC certificate guide. The full source summary is on the Zurich Kotak blog, and policy wording always decides your actual claim.

FAQ

What is the compulsory deductible in a car insurance claim?

It is Rs 1,000 for a private car up to 1,500 cc and Rs 2,000 above that. You bear this amount on every own damage claim.

How long does an insurer have to settle a motor claim?

The assessor’s report is due within 15 days of appointment. The insurer must then decide the claim within 7 days of receiving that report.

Do I lose my no claim bonus if I switch insurers?

No. The bonus belongs to you, not the car. You can carry it to a new insurer with a certificate, provided the renewal gap is not more than 90 days.