Do different types of claims affect the premium?
Yes, like car companies sell different models at different rates, car insurance companies also attach different risks to different types of claims. The common types of claims and their effects include:
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Type of Claim
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Possible Effect on Renewal
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1.
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Minor own-damage claim
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Small increase or NCB loss
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2.
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Major accident claim
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Higher premium increase
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3.
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Frequent claims
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Stronger risk loading
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4.
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Theft claim
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May affect risk profile
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5.
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Third-party liability claim
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Can increase the premium significantly
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6.
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Zero-claim year
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Helps reduce future premiums
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So as you can see, the type of claim has quite a significant effect on the car insurance premiums.
What factors within the claim affect the car insurance premium?
While the car companies in India sell cars at different price points, the car insurance providers attach different risk profiles and assess the insurance premium during renewal based on:
1. Claim due to one's own fault
If you made a significantly large motor insurance claim in the previous year, the insurance company will check why the claim was required. If it is found that the mishap happened due to your mistake, you will be given a higher risk profile. This is because the insurer will see you as an unskilled driver who may get into further road accidents due to improper driving. Hence, the type of accident also determines the risk, and subsequently, the motor insurance premium increases.
2. Claim not due to one’s own fault
If, however, the accident did not happen due to your fault, your risk assessment will look very different. At times, the mishap may be the manufacturer’s fault. In the past, some car companies in India have faced severe backlash for selling faulty vehicles that caused accidents. In other cases, your car may be damaged while parked or destroyed due to an accident caused by a public bus. In such scenarios, the insurer will increase your risk profile, but will not directly penalise you with a sharp rise in the premium.
3. Claim frequency
The next factor is the car insurance claim frequency. If you have made frequent claims in the previous policy year, the insurer will see you as a risky and liable customer who will make many more claims in the future as well. Keeping this in mind, your car insurance premium will go up. The insurer will do this to cover its own risks.
4. Claim amount
Customers who make large car insurance claims are believed to be riskier than those who make smaller car insurance claims. This is because the insurance provider assumes that you will make more such claims, either because you are an unskilled driver or because you own one of the most expensive car brands that require expensive repairs.
5. Insurer’s trends
And finally, the policies of the car insurance company also play a role here. Some insurers attach unreasonable fees and charges to your renewal premium, and that pushes up your car insurance costs. This is why you need to choose a good insurance provider, like Generali Central, who have practical and transparent pricing models for different car brands. It is very important to get associated with a trusted insurer, as only then can you get the best value out of your car insurance coverage.
Read More: Things That Can Shoot Up Your Car Insurance Premiums
How can I reduce the impact of claim history on my car insurance premium?
There are some handy ways in which you can achieve this. Some of them are:
1. Drive responsibly
The first step is for you to drive responsibly. If you do this, the chances of road accidents will be lower, and you will have to make fewer claims. Follow the traffic rules, do not overspeed and drive only in a sober manner.
2. Maintain your car properly
A car that is not cared for is more prone to accidents or breakdowns. This leads to a greater frequency of car insurance claims. Therefore, ensure your car is maintained well. Send it for regular servicing. Park it in a safe area, and install some safety gadgets too.
3. Be judicious about claims
Apart from knowing the correct Motor Claim Process, you should also know when to make a claim. Do not initiate the claim process every time you need to send your car to the garage. Weigh the options and see if the repair amount is small enough to be settled on your own. You must try to reduce the number of claims, as a higher number of claims will definitely push up the following year’s car insurance premium.
Read More: How to Lower Your Car Insurance Premiums
The final word
Claim history plays a major role in determining your car insurance renewal premium. A clean record usually helps you retain the No Claim Bonus and lower premiums, while repeated claims can increase costs through higher risk assessment and premium loading. However, you should still get the best car insurance cover, as it helps financially when genuine losses occur. The goal here is not to avoid claims completely, but to use your policy wisely and maintain a balanced long-term insurance profile.
Expert Note
This information is based on standard motor insurance guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) and commonly followed industry practices. Policy coverage and conditions may vary by insurer.
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