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When Should You Avoid Car Insurance Claims and Why

Team AckoJun 27, 2022

We know that car insurance is mandatory by law and provides financial security in case of car damage. Considering the soaring costs of repairs, we always aim to scout for a car insurance policy that allows us to maximise the coverage while minimising the costs. The main objective of buying car insurance is to get a financial backup for expenses related to car damage or third-party liabilities.

When you buy car insurance and raise a claim, your insurer will bear the expense of repairing the damage as per the coverage. But is it always a good idea to raise a claim each time your car gets damaged? Is it possible that claims can be counter-productive in certain situations? Confused right? Let us unveil some interesting situations when claims can actually be a liability instead of financial aid.

When should you avoid car insurance claims and why

When and why avoid car insurance claims?

Car insurance is an excellent way to cope with the financial burden of accidents, theft, and other types of damages to the car as per the insurance plan. If you are a safe driver or make an informed decision of not raising a claim, then you also get a discount on the premium, called the No Claim Bonus. This is a discount on the own damage component of the policy. Let’s take a look at situations when claiming is not the most productive option.

In case of minor damage

A car can suffer minor damages when you use it on a regular basis. Things like dents, broken mirrors, scratches, etc. can occur very frequently, especially on crowded city roads where driving bumper-to-bumper is quite common.


Your claim history will get badly affected if you raise a claim each time your car suffers minor damage. The insurance company will categorise you as a risky driver and the premium can increase because of your risk profile. Thus, it is best to avoid a car insurance claim when your car suffers minor damage. 

For example, Mr. D had a Hyundai Verna that he used daily for travelling to work. Traffic jams and tailgating led to a scratch on the driver-side door and a broken mirror. The cost of repairs was Rs. 3,000. He thought it was best to bear this out-of-pocket expense as a claim would disrupt the insurance policy’s NCB cycle.

When deductibles are higher

There are two kinds of deductibles in car insurance, compulsory and voluntary. The compulsory deductible is fixed at Rs. 1,000 for car engines with less than 1500cc and Rs. 2,000 for engines having more than 1500cc. Here the voluntary deductible can become a problem as the percentage of contribution is predefined by the policyholder.


When you opt for a voluntary deductible, you agree to pay a percentage of the claim amount if your car suffers damage. If the repair cost of your vehicle is less than the deductible, then it does not make sense to raise a claim as you will bear the full cost of damage anyway. On the other hand, you will also be paying the compulsory deductible as per the terms of the insurance plan.

For example, Ms G owns a Maruti Swift and uses the car for weekend getaways. During one such trip on the outskirts of the city, some kids accidentally threw rocks and the windshield was damaged. Ms G paid the cost of a new windshield as she calculated the claim amount and realised that it was less than the expense she was bearing.

The third party has paid the repair cost

Sometimes accidents can happen because of a third party. The ideal thing to do here is to note the car insurance details and raise a claim against their policy. However, in certain cases, it is possible that the damage is minor and the third party is ready to bear the cost of repairs. In such situations, both parties can agree on the payable amount and settle the matter on the spot.


Claim settlement may take time. You first need to inform the insurance company, register an FIR, raise a claim, and then get the claim amount, this could take from a few hours (thanks to ACKOs instant claim settlement) to several days. Here rightful compensation from the third party on the spot seems like a convenient deal.

For example, Mr. N got into an accident with Mr. S that caused a dent on the side of the car. It was evidently Mr. N’s fault so he agreed to pay a compensation of Rs. 2,000 for repairing the dent. The matter was sorted peacefully.

Your accumulated NCB is higher

NCB stands for No Claim Bonus. It is a discount for not raising claims and maintaining a clean record. High NCB implies that you have a low-risk profile. If you avoid raising claims for five consecutive policy years, then you get a 50% discount on the own damage component while renewing the policy.


NCB is the most significant discount on your car insurance premium. Each year you will get an increased discount for not raising a claim. And it is capped at 50% for five consecutive claim-free years. You will lose this discount if you raise a claim. Plus it seems unnecessary to claim for the amount that costs less than the NCB. 

Frequently asked questions

Here are a few questions about car insurance. Please feel free to contact us via our email address [email protected]

Can I opt for a voluntary deductible for my Third-party Liability car insurance policy?

Voluntary deductibles are usually allowed only on Comprehensive Car Insurance plans. Consider getting in touch with your car insurance company for more details.

In which situations does NCB fall to zero?

There are two situations in which the NCB can fall to zero. The first is when you raise a claim and the second is when you fail to renew your car insurance policy for 90 days or more after the expiry date. The solution to this is buying an add-on called the No Claim Bonus Protection cover. This cover will help you keep the NCB discount intact while you raise an allowed number of claims under this add-on cover.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.


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