Despite owning a seven year old vehicle with zero insurance claims history, I am facing premium hike every year. The vehicle has been well maintained over the years but has several minor dents. Should I claim for its repair and offset the premium paid over the past seven years?Name withheld on request
The main purpose of insurance is to cover any damages caused to the vehicle. If there are substantial damages, you should file a claim. But if these are minor, you must weigh the cost of repairs against the increase in renewal premium of your car insurance.
For every year that you do not claim, you become eligible for the No Claim Bonus. This bonus is deducted from the ‘Own Damage’ premium of your car insurance. Looking at your claim history, you are likely to get 50% No-Claim Bonus. After you claim, this bonus becomes void. Your renewal premium will then go up substantially.
Also, the insurers give special discounts relative to the erstwhile motor tariff. To offer competitive premium. As the car gets older, this discount reduces. This is the reason why your renewal premium increases marginally every year. The special exemption is substantially reduced from the year after which the claim is made. The low special discount clubbed with the zero no-claim bonus will increase your renewal premium substantially.
Insurers may deny claims for accumulated damages. For example, if you have an accident on the left side of your car, any existing damage to its right side will not be covered.
Abhishek Bondia is the Principal Officer and Managing Director of SecureNow.in.
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