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You buy something, you expect to use it. Insurance is no different. You buy car insurance with the hopes that if you ever get into an accident and the car needs repairs, your insurer will help you save on repair costs. You use the insurance by making an “insurance claim” against the damages. Insurance companies receive a lot of claim requests each year and unfortunately, some claims are rejected. Such cases of rejection are a rarity and have sound reasoning behind them like suspicion of fraud or insufficient coverage. As a user, you would still want to check on how many claims a company is settling from the total claims that it receives. The IRDAI Claim Settlement Ratio for an insurance company tells you exactly that!
A car insurance policy is a legal contract between you and your insurance company (in this case ACKO). It says that ACKO will compensate if you suffer a loss, provided the loss you suffered is covered under the terms and conditions of the insurance policy (contract). In return for this compensation, you pay a certain amount of money as a premium for buying the policy to ACKO.
Consider your car meets with an accident and it got damaged. As promised by ACKO, you are expecting to get paid for the monetary loss you suffered. Here you need to file a claim to get paid by us. You, thus, request ACKO to take the necessary actions. One of the methods to understand the reliability of any insurance company is through the company’s Claim Settlement Ratio.
It is an important yardstick to measure the trustworthiness of an insurance company. It helps you understand the likelihood of the insurer compensating you for your loss.
Claim Settlement Ratio is calculated as claims settled in a year divided by the total claims received in a year multiplied by 100. The higher the ratio, the lower the chances of claim rejection.
You must consider various other factors before selecting your insurer. There could be several reasons why this number is low. Read more about “Claim Settlement Ratio”.
At ACKO, we endeavor to embrace the best practices while settling the claims. While doing so, our effort is to continuously make all the information visible that can help our policyholders and prospective customers.
|Category||Claim Settlement Ratio|
|Motor Own Damage Private Car Insurance||95.53%|
Note: *95.50% claim settlement ratio is for Motor-OD portfolio for FY-2021-22.
Looking for an insurance company with the best claim settlement ratio may not always be the most accurate option. Always remember that choosing a company based on the claim settlement ratio is only one of the methods to select a good insurer. Here are all the factors that you need to consider while looking for an insurance company.
Take a look at the IRDAI claim settlement ratio of car insurers. This will help you get an idea of what are the chances of your claim being settled with a particular insurance company.
Your insurer must provide good service after you purchase a four-wheeler insurance policy. For e.g.: look out for value-added services such as 1-hour pickup, instant repairs, 3-day doorstep delivery, etc.
Thanks to technology and social media, it is easily possible to know what people think about a particular service. Check online reviews and ratings of an insurance company to know if the customers are happy with the overall experience.
Each year the IRDAI (Insurance Regulatory and Development Authority of India) releases an annual report. This is an extensive report and it covers the entire details and reports related to the Indian insurance sector.
IRDA mentions details like car insurance claim settlement ratio or motor insurance claim settlement ratio in the annual report. IRDA Car Insurance Claim Settlement Ratio simply means the ratio released by the IRDAI on their official website.
There are two types of claims in car insurance, cashless and reimbursement claims. The nature of a claim will depend upon whether you choose to get your car repaired at a network garage or not. Here are the main 2 types of claims.
ACKO has a wide ntework of partner garages where the damaged vehicles can be taken for repairs. When you make a cashless claim against your car insurance policy, you do not have to worry about the repair costs. You just pay the deductible amount and the rest is taken care of by ACKO. The deductible is a portion of the bill that you pay from your pocket compulsorily or voluntarily.
You make a reimbursement claim when you get the car repaired in a garage that is not a part of ACKO's network of garages. In such a case, you pay for the repairs from your pocket and later submit the original bills, payment receipts, etc. to ACKO. ACKO then subtracts the deductible amount and reimburses the repair amount to you.
You buy an insurance policy to be financially secure during unfortunate events related to your car. However, when such an unforeseen accident occurs, the last thing you want to experience is your insurer rejecting your claim. If this happens, you will have to pay the entire amount from your pocket. To avoid this, how can you check the probability of your insurer honoring the claim? The Claim Settlement Ratio gives you an insight into the possibility of your insurer settling your claim. However, while a claim settlement ratio gives you an idea about your insurer's credibility, you need to consider other factors also while selecting the insurance company. They are after-sales services, online reviews, etc. A higher claim settlement ratio is one of them.
A No Claim Bonus discourages small claims. If you do not make a claim in an active policy year, you get a No Claim Bonus. Such a bonus entitles you to a discount on your premium amount when you renew your policy. This discount can scale up to 50 percent if you don't raise any claims for five consecutive years.
You can avoid making small claims. This helps you reduce your cost of insurance. However, if the loss is huge, you must do some calculations and then go for the right option. For example, let’s say your premium is Rs. 10,000. Your second year’s NCB is 20%. Meaning, your premium reduces by Rs 2,000. Now, the repairs cost you around Rs 3,500. Of this, you pay a compulsory deductible of Rs 1,000. This means the insurance company will only pay Rs 2,500 if you claim. In this case, you could save Rs 2,000 in the future if you pay Rs 2,500 from your pocket today. But it does not make sense. The cost-benefit does not work out in your favor. Had the discount been higher, then you could have considered paying from your pocket.
You can enhance your car insurance coverage by paying extra. The additional covers that you get on the Comprehensive Plan are known as Add-ons. The most common car insurance add-ons include Zero Depreciation cover, Consumables cover, Roadside Assistance, Engine Protection, etc. Add-on covers affect the number of claims that you make. You are unlikely to pay for the loss from your pocket at the time of the claim. However, adding add-ons will also increase the premium amount. Hence, select add-ons that suit your requirement.
Partial claim settlement occurs when your insurer pays a certain percentage of your claim instead of the whole amount. This may happen if the insurer thinks that the claim that you made is not necessary. In such a case, your claim may not be rejected, but partially settled. To avoid such circumstances, you must read the policy document carefully.
No, a genuine claim can be raised unlimited times. However, this would be the rarest of the rare case. In fact, to get advantage of No Claim Bonus, avoid raising claims for minor damages.
Car insurance should be used as a backup financial option for major claims and minor claims should be paid from the pocket. This is because if you have a Comprehensive car insurance policy that covers the “Own Damage” component of the policy, you will be liable to get a discount called No Claim Bonus. You can get a flat discount of 50% when you do not raise any claims for 5 consecutive policy years. Hence, it is a good idea to avoid raising a claim for minor damages.
It is necessary that you inform your car insurance company after making heavy aesthetic changes to the car. This is because the vehicle will be inspected for damages and the details will be verified. These details should match with the ones mentioned on the car insurance policy. There are high chances that the claim will be rejected if you do not inform the insurance company about the paint job.
No, your claim will be rejected if you get the car repaired without informing the insurance company about the damages suffered. This is because the insurer will arrange for an inspection. The estimator will assess the extent of damage suffered by the car. You should always repair the car after getting a green signal from your car insurance company.
An insurer with a high or low Claim Settlement Ratio (CSR) may not always remain at the same rate in the future. While you need to factor in the CSR of an insurer, it should not be the only parameter while purchasing car insurance. The insurer’s services, hassle-free purchases, the Insured Declared Value (IDV) of the vehicle, discounts, stress-free claims, and brand reputation are also some of the factors that you should consider while purchasing car insurance.