What is Cashless Car Insurance?
A cashless car insurance policy allows you to get all benefits of your car insurance policy, such as getting your car repaired after an accident without paying anything out of your own pocket.
The bills for these repairs would be sent directly to us (the insurer!) and we’ll settle the bills with the garage. So, you can simply walk into any garages part of our cashless network, and get your car repaired without spending anything from your pocket (apart from your deductible and depreciation).
In comparison to conventional reimbursement claims, a cashless claim is super-fast, easy and hassle-free. At Digit, we even provide doorstep pickup drop with 6 months warranty!
But remember, this only applies to benefits covered in your car insurance. So, if the damage is not covered by your car insurance policy, you will have to pay out of your own pocket. For example, water damage to your engine is not covered in many basic policies.
Additionally, you will need to pay a small part of the bill in the form of deductibles and depreciation, as per your car insurance policy’s terms and conditions.
How does a Cashless Car Insurance policy work?
Cashless car insurance works through the insurer having direct tie-ups with garages across the country. Such authorized garages – called network garages – who then provide cashless car repair services in case you need to make a claim for any damages due to an accident.
- All you will have to do in an unfortunate case of accidental damage, is to locate the garage closest to you. At Digit, even this is covered with doorstep pickup & drop.
- After letting your insurer know, you can leave it up to the network garage to repair your car and to initiate the process of your cashless claim settlement.
- After the repairs are carried out, the bill is sent to the insurer directly.
- While most of the bill will be paid for by the insurer, you will have to bear the cost of any deductible, and the depreciation cost of any parts that need to be replaced.
- However, you could avoid paying the depreciation charges if you opt for a zero-depreciation add-on cover as well.
What is a Cashless/Network garage?
Cashless car insurance only works if a car is sent for repairs at a garage which is a part of the insurer’s network. A network garage is a garage that has an agreement with the insurer to provide cashless car repair services to any of their policyholders.
To get access to a cashless garage facility, all you need is to get a comprehensive car insurance policy from a reputed insurance company.
At Digit, we offer this along with doorstep pickup-drop and 6 months warranty on the repairs.
Before purchasing the insurance, policy check for the list of network garages provided by the insurer to check whether they have garages near you. Then sit back, and let us handle the rest.
What if no Cashless garages present nearby?
Even if there are no cashless garages nearby, for example, if you're travelling to a remote area, then Digit will make an 80% advance payment for repairs directly to the workshop so that the repair work can start on time.
Once the work is complete, we will pay the remaining amount to the workshop, barring any depreciation and deductibles, as long as the invoice is created in our name.
How to make a Cashless Car Insurance claim with Digit?
The process to seek the claim for a cashless car insurance policy is very simple. You just have to be aware of the list of service and repair centres associated with the insurance company beforehand.
- Step 1 - Just call us on 1800-258-5956. There are no forms to be filled!
- Step 2 – You'll get a link for Self-Inspection on your registered mobile number. Click a picture your vehicle’s damages from your smartphone using a guided step by step process.
- Step 3 - Choose the mode of repair you wish to opt for i.e. Reimbursement or Cashless through our network of garages.
You can visit any of our network garages of your choice, and provide your cashless car insurance policy details.
The network garage will then take it forward from there. From evaluating the extent of your car’s damage, the cost of repairing it, and sending the bill to the insurance company, of course as per the terms and conditions of your customized car insurance policy!
What are the expenses borne by a Customer in a Cashless Car claim?
It is important to note that cashless claims are not actually 100% cashless. You will need to pay a small part of the claim amount in the form of deductibles and depreciation that won’t be covered by the insurer.
Depreciation is when there is a reduction in the value of your car and its parts over time mostly due to wear and tear.
In fact, the moment a spanking new car is driven out of a showroom, it is considered to have depreciated in value by 5%!
When you file a claim, the insurer typically deducts this depreciation cost before making the payment.
With car insurance, there are two kinds of depreciation – the depreciation of the car itself and the depreciation of various car parts and car accessories. The IRDAI has set rules for how the depreciation should be calculated.
When there is a partial loss scenario such as minor vehicle damage, the depreciation on car parts will be considered at the time of a claim. The parts of a car depreciate at varying rates as follows:
- Parts with high wear and tear - rubber parts, plastic components, battery, tubes and tyres, etc. - 50%
- Fibreglass parts - 30%
- Metallic parts - 0% to 50%, based on the age of the vehicle
The depreciation of a vehicle comes into play when there is an incident of a total-loss claim, such as a car theft. This is based on the age of your vehicle.
A deductible is the part of the insured expense that you have to pay out of your own pocket before the insurer pays for the rest.
In car insurance, these deductibles are usually applied on a per claim basis. So, if you file a claim for damages worth ₹15,000 and the deductible is ₹1,000 – the insurer will pay for ₹14,000 worth your car repairs.
Deductibles are of two types – Deductibles and Voluntary.
You will have to decide how much you’re willing to pay while you’re buying your car insurance policy, and this would then be applied to every claim.
Your insurer will only pay the part of the claim amount that is above the total voluntary and compulsory deductible.
Compulsory Deductible - In this kind of deductible, the policyholder has no choice but to pay a part of the motor insurance claim.
According to IRDAI regulations, the fixed the value of this compulsory deductible in car insurance is based on the cubic capacity of the car engine. At present, it is set as follows.
- Up to 1,500 cc - Rs.1,000
- Above 1,500 cc - Rs.2,000
Voluntary Deductible - A voluntary deductible is an amount that normally might be paid by the insurer, but you selected to pay it out of your pocket.
When you choose to have this voluntary deductible added to your insurance cover, it brings down your car insurance premium as the risk on the insurer’s side reduces.
But, it also means that you will have to pay more yourself in case of any damage to your car (which can impact on your other expenses) so do remember to consider this.
Is Cashless Claim better than Reimbursement?
Now that you know what a cashless claim is, you’re probably wondering what is better – a reimbursement claim or a cashless claim?
Well, to answer this question it’s important you know what a reimbursement claim is too.
As the name suggests, a reimbursement claim is when you pay for the cost of repairs yourself and then use the bills, along with supporting documents to get back the money spent, from your insurance company.
The primary difference between the two is that, in this case of a reimbursement - you will first need to shell out money from the entire amount from your own pocket and then go through the added step of verifying submitted bills and payments.
Whereas in a cashless claim, you will only need to pay a small amount of the claim yourself (deductible & depreciation if any) and the insurer will directly make all the necessary payments.
What are the benefits of a Cashless Car Insurance policy?
- No formalities – A cashless policy involves almost no formalities and paperwork, as compared to policies that are not cashless. The claims process is also very simple, as no exchange of cash is involved (apart from a small percentage of your depreciation & deductibles)
- Fast claims – Having a car insurance with cashless claims also means that your claim will be processed much faster. All you have to provide is your policy details, and then get your car repaired straight away.
- No botheration – In a cashless car insurance, almost all transactions take place between the service provider and the insurance company. Therefore, you don't really have to bother about much, everything will be taken care of.
- Easy to use – With Digit, your cashless car insurance will also give you the benefits of doorstep pickup, repair & drop, with 6 months warranty on repairs!
- No need for cash – If your car sustains damages in an accident, the repairs can end up costing quite a bit. With a cashless garage, you don’t have to dip into your emergency savings for these repairs. Just head to the closest network garage and you can get your car repaired without too much trouble!
- Superior service – Insurance companies today usually provide some of the best service centers as their list of tie-ups so you can be sure that the list of network garages will be of good service to you in times of trouble.
- Complete transparency – In a cashless car insurance policy there is complete transparency in terms of the claims provided and claims sought, as everything is carried out digitally. There is the least scope of discrepancies or cheating.