What is the Car Insurance Claim Time Limit?

car insurance claim time limit

car insurance claim time limit

In many situations, policyholders may need to wait before submitting a claim. Is there, however, a deadline by which such claims must be submitted?

In a nutshell, the answer is “No.” However, insurance companies will verify the policy status in light of the occurrence. They look into why claims are being filed late as well.

Furthermore, as stated in the 25 July 2017 issue of the IRDAI Master Circular on unclaimed amounts of policyholders, “If an insurer transfers a policy to the Senior Citizen’s Welfare Fund (SCWF), the policyholder or beneficiary has 25 years from the date of transfer to file a claim for any benefits owed under the policy. In accordance with Section 126 of the Finance Act, 2015, the Central Government is entitled to any unclaimed assets transferred to the SCWF up to 25 years after the transferor’s death.”

Some insurance companies, to be sure, have a policy of allowing policyholders no more than seven days from the date of the accident within which to file a claim. Although the deadline for making a claim may vary by insurer and by the nature of the claim, insurers cannot automatically deny coverage for a claim that is filed late.

“Our car policy spells no time limit,” remarked H.O. Suri, managing director and CEO of IFFCO Tokio General Insurance. In any case, the insured needs to notify the incident within seven days. Some insurance companies require a claim to be submitted within 48 to 72 hours of the incident.”

Such procedures are standard practise within the insurance industry and help ensure the company’s continued financial stability during the underwriting process and after claims have been filed. The insured must also report the incident as soon as possible. For this reason, insurers may reject a claim if the policyholder is unable to provide a satisfactory explanation for the delay.

“Let’s take the hypothetical case of Owner A who left his automobile in a parking lot to attend to some business,” argues Indraneel Chatterjee, co-founder of RenewBuy. When he comes back, the car’s door is severely dented, allegedly at the hands of the driver of the automobile parked next to his. An owner snaps photos of the smashed door and even tracks out surveillance video of the break-in. The photos and videos significantly bolster Owner A’s claim for settlement, making it more likely that he will receive enough compensation.

However, it takes Owner A a few months to notify the insurance company of the damage. The insurer can now deny the claim due to the time lapse. It wasn’t like the policyholder was in a terrible accident and hospitalized for months, preventing him or her from filing a claim. Therefore, the burden of proof rests on Owner A to explain why the claim wasn’t submitted sooner. As a result, even if the insured has provided all necessary documentation and evidence, the claim settlement could be delayed.”

Varieties of Automobile Insurance Claims Settlement

  • Verification without monetary outlay (Cashless)

When you take your automobile to an insurance-approved shop for service, you can file a claim without having to pay anything out of pocket. Cashless claims are exactly what they sound like: claims in which the policyholder does not have to hand over any hard currency to the insurer-approved repair shop in order to get their vehicle fixed. The garage receives reimbursement in full from the insurer immediately when the insurer verifies the claim. The policyholder’s responsibility is limited to the mandatory deductible and the voluntary deductible if selected.

  • Request for Financial Support (Reimbursement)

When you take your vehicle to a shop that isn’t part of the insurer’s approved network for repairs, you’ll need to file a reimbursement claim to receive your money back. In this scenario, the policyholder pays the garage directly for the repairs, and the insurance company reimburses him or her for those costs, up to the claimed maximum. After the policyholder pays any mandatory and/or optional deductibles, the insurer will pay the remaining balance of the claim (if opted for).

How can I avoid settlement delays?

Don’t delay in submitting the necessary paperwork when making a claim. If your insurance adjuster requests it, have copies of the police report, photos of the damage and insurance information for all parties involved ready to hand over. An insurance adjuster will look into your claim if you’re at blame and decide how much you’ll have to pay for the other driver’s injuries and property damage, as well as your own (if you submit a claim under your medical payments/PIP or collision insurance).

If you were not at fault, you should still follow these steps but file a third-party liability claim with the other driver’s insurance company for your damages and injuries.

The investigation into your vehicle accident claim may take several weeks or months, during which time you should expect to have frequent contact with your adjuster.

What happens if a claim is delayed?

If the insurance company takes more than 30 days to respond to a claim, the policyholder may request a written explanation. Even though delays in processing claims are inevitable, most states mandate that insurance providers keep policyholders apprised of the progress of their claims. For further in-depth rules, you should research what’s allowed in your state.

If there were serious injuries, several vehicles, and a question of blame, the investigation into the car collision may take months. If there were serious injuries and property damage, the inquiry into your claim could take longer.

When submitting multiple auto insurance claims, what should I expect?

There is no limit to the number of times you can make a claim on your auto insurance, but you still need to be careful. Here are a few reasons that you should avoid considering submitting numerous claims per year.

There is a reduction in your premium known as the “No Claim Bonus” (NCB) if you did not file any claims during the previous policy period. With every year that passes without a claim being filed, the discount % rises. If you don’t make a claim for five years in a row, you might save as much as 50 percent. So, filing a claim will cause you to lose your eligibility for NCB payments. Only file a claim with your auto insurer if fixing the damage will cost more than the NCB reduction.

Insurers may raise rates at renewal if you file repeated claims against auto insurance. If you’ve filed multiple claims in the past, your insurance company may raise your premiums to account for the additional risk you present.

If you’ve obtained Zero Depreciation coverage for the vehicle insurance policy, then the provider would not evaluate its rate of depreciation when settling claims. But, there could be a limit to the number of times per year that you can submit a claim for this protection.

Avoid filing a claim if the estimated cost of repairs is equal to or less than the deductible specified in your insurance agreement. With the deductible factoring in, filing a claim will still leave you with insufficient compensation.

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