Make The Right Choice In Motor Insurance

Motor insurance comes with the option to go for cashless or reimbursement claims in the event of an accident. Make sure you read the policy document and then decide what works for you, says Jay Sampat

Once the dust settles after a road mishap, what do you do next? How should you proceed with getting your vehicle repaired and getting back onto the road? At such times, frantic vehicle owners ring up their insurance agents to settle accident claims. However, this isn’t quite the right approach.

While you may call your insurance agent to help you out, the first thing you must do is to intimate the insurer from whom you have purchased the policy. We all know that there are very little chances of us getting the full loss amount in case of motor insurance. However, we still need to figure out a way to get the maximum reimbursement possible in case of damage to the vehicle.

Here is the choice between a cashless policy and a reimbursement-based one. Which is a better option for you?

Cashless Policies

When it comes to cashless claims, all insurance companies are tied up with a specific garage network, which they use to repair the vehicles insured by them. The expenses are taken care of between the garage and the company. Under this scheme, the owner of the vehicle has to worry only about accessories and electrical fittings not covered by the policy and exclusions which the insurance company will not bear. Thus, the vehicle owner has to make the payment of only the difference as confirmed by the claims manager to the garage. The insurance company makes payment of its share of the loss directly to the garage.

The pros and cons of a cashless policy are as follows:

• The surveyor takes the vehicle to the garage, gets it repaired and returns it. The owner does not need to get involved.
• The company’s garage network is generally reliable, and hence, one does not have to worry about genuine parts.
• These garages are aware of the mechanics and other intricacies of the vehicle better than the local ones.

Cons

• The paperwork is immense.
• Action is only taken after the surveyor finishes the complete inspection. This often delays the process a great deal.
• Since the garage chosen is usually expensive and since the owner has to pay his/her contribution, he/she may end up shelling out more money than in the case of a reimbursement claim.
• Company garage owners are sometimes not polite, especially if they are going to receive the money a few weeks later from the insurance company.

Reimbursement Policies

A reimbursement claim needs to be undertaken if the vehicle is serviced in a garage outside the purview of the company’s network. In this method, the owners choose their preferred garage and get the vehicle repaired by a mechanic of their choice. They then forward the original bill to the claims manager/surveyor of the insurance company. The liability and reimbursement amount working is done by the insurer and the payable amount is forwarded to the claimant.

The pros and cons of a reimbursement policy are as follows:

Pros

• The owner gets the vehicle repaired by a known mechanic at a known garage.
• Repair work can start immediately after inspection, and hence, the vehicle gets delivered to the owner faster.
• A garage selected by the owner tends to be cheaper than the pre-authorised garages, and hence, is lighter on the pocket.

Cons

• The entire responsibility of getting the repairs done satisfactorily by the garage lies with the vehicle owner.
• The product replacements, wiring and servicing done by a local garage may not be as dependable as those in a company garage. 
• Many a time, faulty bills involving larger amounts are claimed by the TPA (Third Party Agent) on behalf of the owner. Such TPAs pay the owner for repairs and pocket the additional amount.

Buying motor insurance can be quite a battle in itself. When it comes to renewing your insurance, expect a barrage of phone calls with insurance salesmen trying to outdo each other to get your premium cheque, especially if your vehicle is less than five years old. Read through the fine print carefully to be absolutely sure of what you are getting into and get the terms and conditions cleared from the insurance company’s representative before making a decision.

Remember, that just asking the right questions when you get quotes for motor insurance can save you oodles of money and frustration. A less-than-perfect agent may simply go with the assumption that you will read your policy document, but you who are paying good money for the cover, are the most likely to park it in a filing cabinet and forget all about it. Wouldn’t it be a lot better to ask all the questions at the outset?