Insurers reward policyholders for not making
claims, by giving them a discount on the
'own damage' premium of up to 50 per cent,
on a reducing balance basis, in future years.
(See table: no claim Bonus). However, if
you make a claim, you have to start all
over again, from year 2 and also pay a mark-up
in premium equivalent the discount you were
earning. In fact, because of this 'back
to square one' clause, it sometimes makes
financial sense not to raise small claims.
Look at it in a broader sense. Ideally,
whenever your vehicle is damaged, get an
estimate for the repairs, if the no-claim
bonus you stand to forfeit in the forthcoming
years exceeds the estimate, it makes sense
not a raise a claim and instead pay for
the damage yourself.
Savings from No-claim Bonus
No-claim
Bonus
Year
Discount
2
20
3
25
4
35
5
40
6
50
5
*1-On
'own damage' premium on a reducing balance
basis as of August 2003
Savings
From No-claim Bonus
The
no-claim bonus is a great way to progressively
reduce your premium. The table shows
the premium payable towards a Maruti
Zen (LXI, Metallic), costing Rs 3.6
lakh, over six years in two scenarios:
1) When no claim is made and the no-claim
bonus earned, as applicable
2) When a claim is amde every year,
for which a penalty is levied in the
form of a mark-up in premium, equal
to the discount applicable in that year
Year IDV (Rs)
IDV
(Rs)
No-Claim Bonus/Penalty(%)
Premium Payable (Rs)
Scenario 1
Scenario 2
1
3,60,000
0
11,257
11,257
2
3,00,000
20
9,006
11,257
3
2,50,000
25
7,036
9,771
4
2,20,000
34
5,081
9,287
5
2,00,000
45
3,784
9,068
6
1,80,000
50
2,814
8,443
If
you are carrying forward a no-claim bonus
on any vehicle, you can get it transferred
to a new vehicle of the same type (four-wheeler
to four-wheeler, two-wheeler to two-wheeler).
This way, you can slash between 20 per cent
and 50 per cent on the first premium payable
on your new vehicle (when it is the highest).
Say, you buy a new Honda City, costing Rs
7.7 lakh. In normal circumstances, the own
damage premium payable towards its insurance
for the first year would be Rs 25,279. However,
if you were to transfer the 50 per cent
no-claim bonus (the best-case scenario)
on your old car to the Honda City, you would
pay Rs 12,639 as own damage premium in the
first year- a 50 per cent saving.
The only condition to avail of this discount
is that you have to sell off your old vehicle.
Even if you wish to retain your old vehicle,
you can get around this clause by gifting
the old vehicle to a family member. In this
case, your family's saving on premium will
be marginally less, as the old vehicle won't
be entitled to any no-claim bonus on renewal
next year and will have to start from scratch
on the no-claim bonus schedule. Even so,
the premium saving on the new car will far
outweigh the higher outgo on the old car,
resulting in a net gain.
Members of recognised automobile associations
in India are entitled to a discount of 5
per cent on the premium payable, subject
to a maximum of Rs 200 for cars and Rs 50
for scooters.
Vehicles fitted with anti-theft devices
approved by the Automobile Research Association
of India get a 2.5 per cent discount on
the own damage premium, subject to a maximum
of Rs 500.
Claims up to Rs 500 for four-wheelers and
Rs 300 for two-wheelers can be raised without
calling for a surveyor.
You can claim compensation towards towing
the vehicle to a workshop, of up to Rs 2,500
for four-wheelers and Rs 1,500 for two-wheelers.
If you have a sidecar attached to your
two-wheeler, ask your insurer for a discount
on the premium payable. The common perception
is that a sidecar lends more stability to
a two-wheeler, reducing the risk of accident.
MAKING
A CLAIM
If your vehicle is damaged
in an accident, take it to the garage, and
notify your insurer. If the accident takes
place in another city, ask your insurer
to do a spot survey before getting the vehicle
towed to the garage. The insurer will send
a surveyor to inspect the vehicle within
24 hours (in case of a local site) or 48
hours (outstation site) of intimation. It
is advisable you be present during the survey,
to answer the surveyor's questions and put
together the papers. The documents you are
likely to be asked for are:
Claim form
Copy of the insurance policy
Copy of registration certificate of
vehicle and driving license of driver
Copy of estimated given by garage
FIR or a police report if the accident
is major or a criminal offence or if it
caused third-party damage or resulted
in injuries
Fire brigade report, if the loss is
due to a fire
The surveyor will assess the loss and recommend
a claim amount to the insurer, who will pay
that sum to you, if you feel short-changed
by the claim amount, you can ask your insurer
to appoint another surveyor. In case you're
still not satisfied, you can file a complaint
with the IRDA
If you have signed up
for cashless insurance, all you have to
do is take your vehicle to a service center
authorized to settle a claim. The service
center will follow up with your insurer,
and you'll only have to pay the depreciated
portion of the claim.
The paperwork is less and procedures are
fewer in theft cases, file a police complaint
and inform the insurer, if your vehicle
isn't found within 90 days, ask the police
to issue you a 'non-traceable report' -
basically an undertaking by them that they
are yet to find your vehicle-and submit
it to the insurer will wait for 90 days
from the date of theft for the vehicle to
be found, failing which the insurer will
start the claims process.
