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Believe it or Not! Save upto* 75% on TATA AIG Car Insurance

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When to Not Claim Car Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 12/09/2023

When road mishaps occur, the first thing you may turn to is your four-wheeler insurance. And why not? After all, the very concept of car insurance has been curated to help bear the financial losses that arise from unpleasant road scenarios. However, many insurance holders don’t know that there are certain occasions where it is not prudent to raise a claim against your 4-wheeler insurance.

Knowing when to claim car insurance is an old trick in the book that helps you save more money in the long run. And to unravel this mystery, it is important to first understand what happens when you claim car insurance. Let’s dive right into it.

What Happens When You Claim Car Insurance?

Since insurance directly influences your finances, experts always advise insurance seekers as well as policyholders to know the processes and associated impacting factors.

As you may be aware, when you buy a car policy online, you are asked to provide certain information by the insurance company. This includes the car's make and model, the vehicle's age, manufacturing year, previous driving history, etc. All these factors together determine how much premium would be payable by an insurance seeker. At the time of your 4-wheeler insurance renewal, insurance companies also ask for information on previous claims. It plays a crucial role in determining the subsequent premium. It is a way in which an insurance company calculates risk. The riskier the client, the costlier would their insurance coverage be. And so, when you raise a claim, you are associated with a certain risk.

Let’s look at the key factors to help you understand when to claim car insurance.

Factors to Consider While Raising a Claim Against Your Four-Wheeler Insurance

When you buy a car policy online, your primary objective is that it helps you cover the risks and damages to your vehicle. However, your car insurance automatically becomes expensive when the risk is higher. As claim history adversely affects the premium rate, insurance holders must be cautious when they raise a claim against their four-wheeler insurance. Knowing when not to file a car insurance claim can come to your aid at the time of policy renewal and save you a lot of money in the long run. To help you calculate when to file a car insurance claim and when to refrain from doing so, we have enlisted the three determining factors:


Deductibles refer to the amount the policyholder is expected to pay before the insurance provider starts to pay. Essentially, your insurance provider is only liable to pay the amount that exceeds the deductible. There are primarily two kinds of deductibles: compulsory and voluntary. Compulsory deductibles are a set amount that has to be paid every time a claim is raised and the amount is usually determined by the engine capacity of your vehicle. Voluntary deductibles are the amount payable that is chosen over and above the compulsory deductible by the policyholder. Voluntary deductibles are inversely proportional to the insurance premium. In other words, the higher the voluntary deductible, the lower the premium rate. Deductibles are introduced to prevent raising false claims.

When an individual raises a claim against their 4-wheeler insurance, their insurance provider will compensate for the repair costs and damages after reducing the deductible and the depreciation amount. Considering this, it is entirely useless to raise a claim against your car insurance for small amounts. To specify further, small amounts are costs that are less than or close to the deductible amount mentioned in the car insurance policy. The insured member will gain very little from raising a claim in this situation and risk losing their no-claim bonus (NCB).

No-Claim Bonus

One of the most enticing rewards offered by the insurance company is the no-claim bonus (NCB). It is a reward for the insured member for not raising a single claim during the tenure of the car insurance policy. When a car owner prudently uses their vehicle, the insurance company offers discounts on the premiums payable. Interestingly, the NCB is also transferable from one insurance provider to the next and is retained when purchasing a new vehicle. If you sell your old car for a new one, your NCB is transferred to the new one, thereby enabling you to save considerably on your new car insurance cover.

Typically, policyholders get a 20% discount on their premiums for not raising a claim in the second year of their car insurance. This discount on premiums further increases to 25% in the third year, 35% in the fourth year, 45% for the fifth, and 50% for the sixth year. However, even with a single claim raised against the car insurance, this NCB is lost, and the policyholder has to start with a clean slate. The comprehensive car insurance by Tata AIG can be further secured with the NCB protection cover. Under this add-on, one can file a specified number of car insurance claims while retaining their NCB discount.

For those wondering when not to file a car insurance claim, the answer is simple: when the NCB amount is higher than the cost of repairs.

Third-Party Insurance Claim from the Third Party

Although it is difficult to maintain calm in distressing scenarios such as a road accident, carefully analysing your situation can help protect your NCB.

Consider the following scenario: you have not raised a single claim for six years and expect great NCB benefits when your vehicle is involved in an accident. Now, you have three possible routes to explore:

If the damage is small, paying for the repair cost from your pocket

Raising an insurance claim to cover the damages, or

Filing a third-party insurance claim

If your accident is caused owing to the fault of a third party, you can choose the third option. With their fault, you can claim third-party insurance from them and subsequently protect your NCB benefits while maintaining your claim-free record.

The Bottom Line

When you invest in a car policy online, you must also learn when to file a car insurance claim to help you get the best out of your motor insurance. A general rule to follow is to only raise a claim for big losses and refrain from filing one in case of minor mishaps. If you are new to the world of insurance, you may even discuss the claim with your insurance provider, who can advise you appropriately on the most suitable solution.

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