
Driving a car in India requires investing in liability insurance, and comprehensive coverage is recommended for complete financial security on the road. But have you ever thought: what if, even after having insurance, you cannot get your car repaired after an accident because you don’t have enough liquid cash to pay for the hefty expenses? That is where cashless car insurance steps in.
What is cashless car insurance?
Cashless car insurance is a feature of your standard motor insurance plan that allows you to get your car repaired without paying anything upfront. Nowadays, car insurance providers have partnerships with reputable garages and service centres across India to ensure you get quick repair services without the hassle of reimbursement claims.
However, before you buy this plan, you must check if the insurer you choose has network garages in your city or along your commute route.
Steps to raise a cashless car insurance claim
Documents required to raise a cashless car insurance claim
To ensure a smooth claim settlement for car insurance online, provide the following documents:
Does cashless insurance mean 100% settlement?
The one-word answer to this is "No." The insurer requires you to pay the following two:
Deductible
A deductible in car insurance is the amount you must pay out of pocket before your insurer covers a claim. For example, if your deductible is ₹6,000 and repairs cost ₹18,000, you must pay ₹6,000, while the insurer will pay the remaining ₹12,000.
There are two types of deductibles: compulsory and voluntary. The IRDAI sets the compulsory deductible, which is ₹1,000 for cars with engine displacements up to 1500 cc, and ₹2,000 for cars with engine sizes over 1500 cc.
The voluntary deductible amount is selected by you. The higher the deductible you choose, the lower your premium, but your out-of-pocket expenses will increase accordingly.
Depreciation
Depreciation in car insurance refers to the reduction in your car’s value over time due to factors like age and wear and tear. When you make a claim, the insurer calculates the amount by deducting depreciation from the total repair or replacement cost.
For example, if you file a claim for a damaged car part that costs ₹10,000 and has depreciated by 50%, the insurer will only cover ₹5,000, with the remaining ₹5,000 being your out-of-pocket expense.
The rate of depreciation for cars and their parts is pre-decided by the IRDAI. Here are the details:
Car's Age | Depreciation Rate |
Up to 6 months | 5% |
Between 6 and 12 months |
15% |
Between 12 and 24 months |
20% |
Between 24 and 36 months |
30% |
Between 36 and 48 months |
40% |
Between 48 and 60 months |
50% |
Depreciation of Car’s Components
Components | Depreciation Rate |
Nylon, Rubber, and Plastic components |
50% |
Fibreglass components |
30% |
Battery |
50% |
Conclusion
Opting for cashless car insurance online or offline offers convenience and peace of mind. It allows you to get your car repaired at network garages without paying upfront, as the insurer directly settles the bill. This eliminates the need for tedious reimbursement claims and ensures faster service, saving both time and effort during unexpected breakdowns or accidents.