Standard Deductions in a Car Insurance claim
Against popular belief, the entire garage bill is not borne by the Insurance Company. There is something called as a ‘deductible’ or ‘excess’ which is the amount the vehicle owner needs to pay from his own pocket whenever there is a motor insurance claim. The deductible has two types, compulsory deductible and voluntary deductible. In addition to the deductible, there are a few more deductions that are made to the final settlement. The following is the list for the same:
It is the specific amount pre-decided by the Insurance Company which the policyholder has to pay regardless of the claim amount. A high compulsory deductible forces the owner to be more cautious, as in the event of a claim, he will have to pay from his own pocket.
If the policyholder wishes to receive a discount on the policy premium, he can opt to pay an amount over and above the compulsory deductible. The policyholder is basically rewarded with a discount for sharing the cost of the repairs. For instance, if you choose to pay a voluntary deductible of 4000 Rs, you may receive a discount of 20%-30% on your policy premium. However, please note that you need to pay the voluntary deductible in addition to the compulsory deductible.
The cost of depreciation of the vehicle is considered at the time of the claim. This means, you are re-imbursed taking into account the depreciated cost of the vehicle parts and not the cost of new parts. Please note that a nil-depreciation cover can take care of this problem.
The expenses related to the consumables of the car such as the engine oil, fuel, coolant etc are not covered by your policy. Hence, you will have to pay for them from your own pocket, unless you have opted for a consumables cover.
Major Exclusions in a Motor Insurance policy
Before filing a motor insurance claim it is crucial that you are aware of the exclusions in the policy. This ensures that there is total transparency and there are no surprises during the claim process. Hence, let’s go through the exclusions of the policy:
- Normal depreciation of the vehicle through gradual wear and tear
- When the vehicle is used for any commercial activities
- When any manufacturer guideline is not followed
- Breach of any traffic laws such as not carrying your license, or driving under the influence of alcohol or any other intoxicant
- Damage or loss of the vehicle after the policy expires
- Damage to the Engine because of oil leakages