Think before you claim car insurance: You could lose more than you gain; read this to find out

A repair bill of ₹12,000 may look like a reason to claim car insurance. But what if avoiding that claim saves ₹22,000 when your policy comes up for renewal? Paying from your pocket could leave you better off.

This comparison explains why a claim should involve calculation. The amount on the repair bill does not tell the story.

Start with what you could lose

Your No Claim Bonus (NCB) rewards you for keeping a claim-free record. It can reduce your renewal premium, making smaller claims less attractive.

Suppose covered repairs worth ₹12,000 are approved while your NCB benefit is ₹22,000. Paying yourself may make more sense.

Now consider a ₹45,000 repair bill against the same ₹22,000 benefit. A claim would generally be more useful, depending on the eligible payout. The important comparison is between that payout and the NCB benefit you might forfeit.

Check what you must pay

Even an approved claim may leave you with part of the expense. This contribution is called the deductible. A higher voluntary deductible can lower your premium. However, it also increases your contribution when you make a claim.

For example, consider a ₹30,000 repair bill with a ₹7,500 voluntary deductible. You would bear ₹7,500 while the insurer pays the remaining eligible amount under the car insurance policy terms.

This means your calculation should use the expected payout, rather than the entire repair bill.

Confirm that your policy covers the damage

Before doing these calculations, check whether the repair qualifies for a claim. Review whether you hold third-party cover, comprehensive cover or additional protections.

Read the covered events, exclusions, payout limits and deductibles. Assuming every repair is covered can lead to disappointment when you need financial support.

Also, check the conditions attached to your add-ons. An Engine Protection add-on, for instance, may restrict how often its benefit is available.

Own Damage claims generally have no fixed annual limit. However, several claims may lead to a higher renewal premium. Being allowed to claim repeatedly does not mean every claim offers equal financial value.

Look beyond the repair

Review your car insurance protection periodically and choose an appropriate Insured Declared Value (IDV). Renew your policy on time.

Consider add-ons such as Zero Depreciation, Roadside Assistance and Engine and Gearbox Protect. Their suitability should be part of the review of your cover.

Before claiming, compare coverage, your contribution, the likely payout and possible NCB loss. A few calculations can help you make a decision that suits your situation.