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Originally Posted by zaks Still nobody has been able to answer my trade off question i.e, when a claim is made on my insurance what would my premium jack up to?
Why should we be worried about anything when we have insurance other than for safety reasons?? |
In Insurance there are 2 parts - one Liability (Or 3rd Party as we know it commonly) and second is OD or Own Damage.
Per the IRDA rules - an insurance company can give discounts only on OD premiums - which basically means you will get NCB discount unless until you claim OD. So in such cases where damage to your vehicle is minimal you can get it repaired and write off the loss. If there is a liability claim - it does not have an impact on your NCB.
Coming to the question "How do you determine if you should be filing a claim or if there is a cutoff amount above which you should claim an insurance". Now that would depend on a number of factors -
a - Extent of the damage and estimated cost to repair
b - How much of the repair cost you will have to bear if repairs have to be carried out (All the repairs are not covered for 100% - ex rubber parts are covered uptill 50%). So you would need an estimate that out of the damages how much your insurance policy would cover.
c - Voluntary Deductible you carry on your insurance policy (deductible is the amt which you will have to pay out of your pocket - insurance company would need you to pay some amount and they would pay an amount in excess of your deductible)
d - The time you have kept the vehicle and the current premium & NCB bonus you have on your insurance.
If say your premium for current year is 10,000 and you have had this vehicle for 2 years now - you can predict for next year the premium should be close to 6,000 (The car's insured value would have come down and at the same time you would be eligible for a NCB discount of 30-35%) so if you don't claim any own damage - for the next year you save 4,000 as your insurance premium.
Now suppose that you meet with an accident - and say your bumper needs to be replaced - assuming that the cost of replacing a bumper is 3500 and labor is 500. The total cost is 4000. Obviously - you'd have to shell out 500 as deductible and Insurance would not pay for 100% of the repairs so insurance would cover you for about 3200 and rest you will have to pay out of your pocket.
Now in such a case it'll be better if you get the work done on your own rather than claiming an insurance because if you claim insurance it'll cost you 4800 in the long run. 800 for the part you would have to pay and 4000 is the discount you will lose out for next year's premium.
At this point there is one more thing which comes into play - which is "For how long you intend to keep the car?" If in such a case you plan to sell off your car shortly after the accident - it'll make sense for you to claim the insurance and get the repairs carried out. However if you plan to buy a new car after you sell off this car - then it's better not to go for an insurance claim. You can transfer the NCB from your old car to the new car that you will be buying, the first year premium of a new car is high so a 35% discount you'll get is going to translate into a higher figure.
So that's the long and short of it.
Actually there is no magical figure or formula that you can apply to find out if you need to go for insurance claim or not. You will have to determine it for yourself.