Is it advisable to claim for scratches in car?
Owning a car comes with the joy of freedom but also the responsibility of upkeep. One of the most common frustrations for car owners is discovering scratches, whether from a careless passerby or an unfortunate mishap.
When it comes to insurance, many wonder if it’s worth filing a claim for these minor damages. While car insurance can offer financial relief, not every scratch warrants a claim. Let’s explore the factors to consider before making this decision.
What does car insurance cover?
Before deciding to claim insurance, first, understand what a car insurance policy covers. There are two main types of car insurance in India:
1. Third-party liability cover: This basic cover legally required by the Motor Vehicles Act, 1988, protects against any legal liabilities arising from accidental damage caused to a third-party vehicle or property or injuries/death of a third party.
2. Comprehensive cover: This offers broader coverage by including own damage cover for your vehicle along with third-party liability cover. The own damage portion covers damages to your insured vehicle from:
- Accidents
- Theft
- Natural calamities
So, while third-party insurance will not pay for repairs to your car, a comprehensive policy will pay for damages to your own vehicle, including scratches.
Factors to consider before claiming for scratches
Though you may be legally entitled to receive payouts for scratches under a comprehensive policy, there are a few downsides to frequent minor claims that you should evaluate:
Higher premiums
Frequent claims for even minor damages portray you as a high-risk driver to insurance companies. This causes them to hike your premium substantially when your policy is up for renewal. The increased premium amount can cost you much more in the long run than paying out-of-pocket for minor scratches.
Loss of no claim bonus
Car insurance providers offer a No-Claim Bonus (NCB) as a reward if no claims are made during the policy tenure. The NCB discount can be as high as 50% over time. However, even a minor claim can result in the loss of this cumulative bonus built up over the years, subsequently resulting in higher premiums.
Paying deductibles
Deductible refers to the portion of a claim amount you must bear under insurance policies. If you’ve opted for a high deductible to reduce premiums, you’ll still need to pay a sizeable deductible out of pocket for each claim. For minor scratches, this deductible amount may exceed the actual repair cost!
Weighing the costs
Before rushing to file a claim, weigh the short-term benefit of getting scratches repaired free of cost against the higher long-term costs of increased premiums and loss of NCB that you may incur. In most cases, the latter costs can dwarf the current scratch repair expenses. Paying for repairs now and preserving your No Claim Bonus may work out cheaper.
When does claiming make sense?
While minor scratches are best paid for out of pocket, there are instances where filing an insurance claim is justified:
Deciding if claiming car insurance is worthwhile
Paying out-of-pocket for minor scratches or dents to avoid insurance hassles often makes practical sense. But there are certain instances where the costs justify filing a claim, even if your premiums rise or you lose your hard-earned No Claim Bonus subsequently.
When do such cases arise? Let’s examine specific scenarios:
Repair costs are too high
If the costs to fix extensive damages like a smashed headlight, deep paint scratches or large dents are beyond what you can afford comfortably, submitting an insurance claim is wise. Shelling out a large sum all at once can impact your savings. Letting insurance cover expensive repairs makes financial sense.
Major accident damage
Repairs can run into lakhs if your car suffers major structural deformation in an accident. Paying this massive cost on your own is not practical. By claiming insurance, you get your car fixed without financial stress. The long-term premium hike seems tiny compared to the immediate advantage.
Theft or total loss
The worst-case scenarios of theft or total destruction of your insured car warrant strong justification for claiming insurance blindly. You need significant financial help to either recover the stolen vehicle or replace the totalled car. So, despite losing NCB discounts subsequently, claiming insurance becomes unavoidable.
Selling car soon
If you plan to sell the car within the next few years, increased premiums lose relevance since you won’t renew the policy anyway. So, whether it is accident or theft damages, raising an insurance claim for comprehensive repairs before transferring ownership makes sense.
In such cases, the large and unavoidable costs justify absorbing the premium increase and losing the NCB to get reimbursement from the insurer.
Tips to avoid scratches
While evaluating whether to claim insurance or not, also focus on some preventative actions to avoid scratches in the first place:
- Park carefully in allotted slots to prevent dings
- Apply scratch-resistant coatings on exterior body
- Install bumper doorsill guards for added protection
- Affix paint protection film on vulnerable areas
- Wash frequently to remove debris stuck to the paint
- Cover your car with a fabric when parked
The bottom line
Dealing with scratches on your precious new car can be upsetting. But resist the urge to rush into claiming insurance without evaluating long-term costs. Paying out of pocket for minor repairs preserves your No Claims Bonus and avoids premium spikes at renewal. Evaluate all options and make an informed call. And take proactive measures to safeguard that glossy coat from preventable damages!
