Reimbursement vs Cashless Claims in Car Insurance

Reimbursement vs Cashless Claims in Car Insurance

The most crucial aspects you need to understand is how to claim, if a need arises at any point in the future in case any damges take place. The entire claim process - from filing the claim to receiving the claim amount can be quite lengthy and tedious. Hence, it is essential to understand how the claim process works in order to avoid hassles later on.

There are two types of claims in car insurance - Cashless claim and Reimbursement claim.

What is a cashless claim? What is a reimbursement claim? How do they work? What are the steps that need to be followed for the claim process? Let's find out in this article.

What is a Cashless Claim?

Let's say while driving, another driver hit your car, causing severe damages to the doors of your car. You took your car to a network garage, i.e., a garage listed with the insurance company. to get the damages fixed. In case you raise a claim, the insurance company shall directly pay the claim amount to the garage for the repair of the vehicle. This is called a cashless claim.

In the event of damage to the car, a cashless claim is applicable only if the repair is done in the garage that is part of the insurance company's network.

You are not responsible for any costs other than -

  • Compulsory deductibles
  • Consumables (if any)
  • Depreciation charges (if zero depreciation cover is not taken for your vehicle)

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What is The Process of A Cashless Claim?

You need to follow these steps to ensure a seamless cashless claim process -

  • In the case of an accident, you must immediately contact the insurance company and disclose the accident details to them.
  • Inform the insurnace company about the garage address where you have taken your vehicle for repair and complete the formalities requried. If there is a death or third party involvement, the company will request for an FIR.
  • Once the insurance company receives all the required information, they will send an inspector to check the vehicle's condition at the garage.
  • Following the inspection and approval of the surveyor, the garage can commence the repair work of the vehicle.
  • The garage will hand over the repair bill and invoice directly to the insurer once the work is being completed.
  • After deducting depreciation charges and deductibles, the insurance company will settle the claim amount to the garage.

What is A Reimbursement Claim?

In the event of an accident, if you get the car repaired in a garage not listed with the insurance company, you need to pay for the cost incurred. The insurance company shall reimburse this repair cost when you will present the bill.

What Is The Process Of A Reimbursement Claim?

Follow the steps listed below to ensure a smooth reimbursement claim process -

  • You must notify the insurance company about an accident in order to make a reimbursement claim.
  • Depending on your insurer, you may be asked to submit documents such as a duly filled claim form and garage estimates. An FIR is required if a death occurs or another party is involved.
  • After the submission of the documents, the insurer will send a surveyor to the garage to inspect the vehicle.
  • As soon as the garage receives the surveyor's approval, repair work shall bagin.
  • You must pay the entire repair cost of a vehicle to the garage.
  • To get the reimbursement, you need to submit repair estimates, bills, and other documents to the insurance company for validation.
  • Documents required for the reimbursement are:
    • Duly filled and signed claim form.
    • Copy of an insurance policy.
    • Tax payment receipt.
    • An estimation of the vehicle repair cost from the garage. Ensure that it is signed and stamped by the garage.
    • Original repair invoice and payment receipt - signed and stamped by the garage. Note - Cashless claim requires only a repair invoice.
    • claims discharge cum satisfaction voucher signed across a revenue stamp.
    • Vehicle inspection address details - if you have not taken the vehicle to the nearest garage.
    • Your driving licence - a verified photocopy to the surveyor along with the original.
    • Registration certificate - a verified photocopy to the surveyor along with the original.
    • Pan Card.
    • Aadhaar Card.
    • Pollution Under Control Certificate - a photocopy.
    • Cancelled Cheque/Passbook.
  • Upon verification of your documents, the insurance company will initiate the reimbursement process and pay you the claim amount.

Note : No matter what type of claim is filed, be it a cashless claim or reimbursement claim, the repair work on the vehicle should commence only after the surveyor has given the approval. Any repair work done on the vehicle prior to the surveyor's consent will not be covered by the insurer.

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Let's Compare Both of These Claims And Understand The Differences:

Parameters Cashless Claim Reimbursement Claim
Up to 6 months When you file a cashless claim, the garage gets paid directly, and you pay only a minimal amount for the deductibles, consumables, and depreciation. Reimbursement claims require you to pay all repair costs upfront. Afterwards, you will receive a reimbursement from the insurer.
Time for settlement The amount is directly transferred to the garage, so the claim settlement process takes less time. The process takes longer time than cashless claims because you have to pay all the expenses and obtain reimbursement from the insurer.
Choice of Garages Vehicles can only be taken to garages that are listed with the insurance company. You can take the vehicle to any garage of your choice since the repair costs shall be covered by you initially.

Now that you know the difference between cashless claim and reimbursement claim, we are confident that you will be able to use each of these effectively. Ensure you check the list of garages provided by your insurance company to avoid any hassles in the future.

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