Multiple Car Insurance Claims: How Many Times a Car Insurance Claim can be Filed in An Year?
Read to know the different types of impacts of raising multiple car insurance claims.
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A car is an important investment in everybody’s life. To drive it peacefully and safely, you need to comply with legal requirements by insuring it with a car insurance policy. In addition to adherence to the law, car insurance also gives a financial backup, in case your car is damaged. To get compensation for any damage or loss sustained by your car, you need to notify your insurance company by filing a claim. So, let’s find how many times you can raise a claim and what impacts can multiple car insurance claims can make in this article.
What Are The Annual Claim Limits of Car Insurance?
When we talk about car insurance claims, there are no specified limits for the number of times a claim can be made in a year. However, it is important to note that when you make multiple claims every year, it increases the chances of your car insurance premium hike. This hike will not happen in the same year, but when your policy renewal happens. Making multiple claims in one year also makes you privy of losing your no claim bonus (NCB) which is a discount that is offered to a policyholder during renewal if they have not made any claim in the previous policy year.
How Many Car Insurance Claims Are Considered Excess?
There is no certain answer to this question. It actually based on the type of car insurance claim and the damage extent suffered by the car. However, it is suggested to not raise any claim for minor damages which may include a dent on the bumper or a broken mirror. Try to file a car insurance claim only if the damages are severe.
What Happens On Making Multiple Car Insurance Claims?
Although there is no specific limit attached to the number of claims that you should file in a policy year. Here are some reasons why you must avoid raising multiple car insurance claims in a policy year:
1. No Claim Bonus
No Claim Bonus is a reward in terms of a discount on the next year’s policy premium provided by the insurance company for raising no claim in a policy year. With every claim-free year, the NCB accumulates from 20% and can go up to 50% with 5 consecutive claim-free years. Raising any claim in between can make you lose on your earned NCB benefits. So, raise a car insurance claim only if your repair expense is higher than the NCB discount.
2. Increase in Premium
If you raise multiple car insurance claims in a policy year, if you file multiple claims against the car insurance, the insurance company can increase the cost of a premium during the renewal of the policy. Several claims in a year denote you as a higher liability or risk to the insurance company, therefore, the inusrance provider might increase the premium of your plan to cover you.
3. Zero Depreciation Cover
If someone has added a zero depreciation add-on cover to his or her car insurance policy, the insurance company will have to compensate the person without considering the rate of depreciation during the settlement of the claim. However, there are some limitations on the number of claims which you can raise under this zero depreciation cover in a year.
4. Deductible Amount
It is always considered better not to raise a car insurance claim if the cost of repair is lower or a little bit higher than the amount of deductible as specified in your policy document. Even if you have raised a claim, you may receive an insufficient amount of compensation due to the deductible component in your car insurance policy.
What Are The Disadvantages of Making Too Many Car Insurance Claims?
There are a few disadvantages of making too many claims in a policy year which you must be aware of:
- No Discount or No Claim Bonus (NCB) During Renewal: When you make multiple claims in a given policy year, you lose your no claim bonus discount during policy renewal.
- Increase in Car Insurance Premium Price: When you make multiple claims in a year, this leads to an increase in your car insurance premium next year. This is irrespective of the case where you choose to renew with the same or a new insurer.
- Risk of Policy Cancellation: When you make too many claims in a given policy year, there is also a risk of completely losing your policy coverage or leading to non renewal of your existing policy. Your insurer will not cancel your policy mid year but have an option of rejecting your policy renewal.
- Issues in Getting Future Insurance: Since your claim history gets tracked, you may face issues in buying a new policy later.
Conclusion
When you make a claim request, you do not just get compensation but also a few modifications in different components of your policy. Here are a few details mentioned in this article about the impacts of making multiple car insurance claims. Going through the points in the write-up will help you understand the effects of raising various claims so that you can make the claim request accordingly.
Frequently Asked Questions (FAQs)
Q. Can I make multiple claims in a policy year?
Ans. Yes, you can make multiple claims in a policy year. However, make sure you do not make claims for minor issues or repairs or too many claims as this may lead to an increased premium next year. Your insurer may also choose to not renew your policy given your claim history.
Q. What are the disadvantages of claiming car insurance?
Ans. When you make multiple claims in a year, your no claim bonus amount is lost, your next car insurance premium is increased, there’s also a chance of cancellation of your policy renewal next year and chance of rejection in getting future car insurance.
Q. What is the maximum number of claims allowed over a year?
Ans. You can make multiple claims in a given policy year unless there is a specific number pre-defined and agreed upon between you and your insurance company.
Q. Can I claim insurance for car 2 times in a year?
Ans. Yes, you can claim car insurance twice a year since there are no restrictions. In fact you can make multiple claims but this also increases your next year policy price.
Q. Does making a claim affect my insurance?
Ans. Yes, making a claim usually tend to increase your next car insurance premium.
Also Read:
How To Lower Premium of Your Car Insurance?
Top Factors That Determine The Premium of Your Car Insurance Plan
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
