Top reasons for receiving a partial settlement from a car insurance claim 02nd January 2023
Insurance is an effective mechanism that protects the insured from the financial loss incurred due to damage to an asset. The prudent instrument protects high-value assets like vehicles, in the absence of which the victim has to shell out large sums of money to compensate for the damages to own property and third-party damages.
Despite the safety provided by online car insurance and its allied merits, sometimes the insurer does not approve a complete settlement, leading to being partially compensated. With proper knowledge regarding the procedure, related proofs, and some tips to remember while making claims, it is possible to receive a complete car insurance settlement.
Reasons for partial settlement:
Comprehensive car insurance is the easiest way to ensure that the insured is covered for maximum damages and receives the entire claim amount. If you haven't purchased comprehensive car insurance, you may encounter only a partial settlement for the following cases.
1. Depreciation:
Loss of value of a car due to wear and tear and usage is an inevitable factor that is considered while paying out claims. Damages to parts, including fibre and glass parts, tubes, tyres, etc., are only settled after considering their depreciated value according to the fixed depreciation rates and the age of the vehicle. A zero depreciation cover can help supersede this clause, but several conditions must be considered to avail of its benefit.
2. Partial car insurance coverage:
A partial cover protects the insured from the financial burden of third-party damages and has fewer inclusions while being less expensive than the latter. The policy restricts customisations and is ideal for infrequently used or old vehicles. The policy excludes NCB and its own damages, limiting its scope and increasing the financial burden on the insured.
3. Policyholder negligence:
Negligence while driving is a major cause of accidents. Suppose your insurer suspects that the driver was under the influence, negligent of general driving safety norms, or holding an invalid driver's licence at the time of the accident. In that case, your claim may be rejected or partially settled, depending on the severity of the issue and the claim amount.
4. Lack of proof:
It is essential to submit valid proof of the accident while filing a claim. With inadequate evidence, the insurer may not process the whole claim amount. Pictures of the accident site, eyewitness testimonies, and immediate filing of an FIR are some of the required proofs asked for by the insurer.
5. The car is used for business purposes:
If the insurer discovers that your personal car was used for business or commercial purposes at the time of the accident, you might not get a 100% claim or even a denial of the claim by the insurer.
Tips to speed up the claim settlement process:
While there is no fixed way to guarantee complete settlement, by following the below stated steps, you can ensure the fulfilment of your responsibilities to ensure that you receive the highest amount of claim possible.
1. Initiate the settlement process immediately:
Starting the process immediately after the accident is vital to ensure a quick settlement. It is ideal for raising the claim within seven days of the accident.
2. Keep all the relevant paperwork ready:
Each payment processed to rectify the effects of the accident, including maintenance of the car or replacement of parts, medical bills, the FIR copy, etc., should be maintained and provided to the insurer as proof.
3. Negotiate your demands:
Before reaching the final settlement, which you must ensure is in writing from the insurer, recheck if the amount is justified. Do not refrain from negotiating the sum with adequate reasoning. Consider seeking the help of a legal professional to make the process faster and ensure that your demands are satisfied.
When purchasing conventional or online car insurance, it is critical to read the fine print to ensure awareness regarding all the inclusions so that you can raise proper claims appropriately to settle at the earliest.
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Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.