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Claim Settlement Ratio In Car Insurance Plans

Updated On Oct 18, 2023

Claim Settlement Ratio In Car Insurance Plans

Nowadays, having a car is not seen as a luxury. Today, practically everyone can purchase their own vehicle owing to the lower-cost automobile models that are readily accessible on the market. More individuals are considering investing in a car both for themselves and their families as the necessity for a pleasant commute has grown.

The demand for vehicle insurance plans is rising along with the demand for automobiles. If your automobile is destroyed or stolen for some improbable cause, having car insurance will help pay your expenses. According to the terms of the Motor Vehicles Act of 1988, if you possess an automobile, you must insure it. To find out more on the claim settlement ratio in car insurance plans, read on.

Claim Settlement Ratio In Car Insurance Plans

What Exactly Is A Claim Settlement Ratio?

The Claims Settlement Ratio is one of the key factors that highlight an insurance company's dependability. It represents the proportion of resolved claims to the total number of files that are available for processing. The ratio gauges an insurance company's dependability in honouring claims made by covered parties. It is believed that the ratio should be larger the better for the insurer.

How Can An Individual Choose The Car Insurance For Themselves?

Following are the parameters under which an individual can choose car insurance for themselves -

  1. Analysing Needs - You must first assess your demands in order to choose the finest auto insurance, provider. You should be aware of the degree of coverage, IDV, add-on covers, and the highest premium you are able to afford for the policy.
  2. The legitimacy of the Insurance Company - You should search the market for reliable auto insurers, whose IRDAI Registration Number you can verify. Only legitimate insurance firms are allowed to register with IRDAI, India's insurance regulating organisation.
  3. Claim Settlement Ratio - You may look at the insurance companies' Claim Settlement Ratio (CSR) and Incurred Claim Ratio (ICR), since a larger proportion of these ratios lowers the likelihood that the insurer would deny your vehicle insurance claims.
  4. Cashless Garage Network - You should look up the insurance company's network of cashless garages. A broader network of cashless garages is usually preferable because it increases your chances of discovering one in your neighbourhood or city. 

What Are the Types Of Claim Settlement?

Following are the types of claim settlement -

  1. Cashless Claim - When you get your automobile fixed at a shop that has been approved by the insurance, the claim will be settled without the use of cash. As the name implies, the whole process for this kind of claim is cashless, meaning the client is not forced to pay cash or money to the insurer's approved garage for the repair of his or her vehicle. The amount the insurance pays the garage directly relates to the magnitude of the claim. The statutory deductible and optional deductible are only payable by the policyholder if chosen at the point of insurance purchase.
  2. Reimbursement Claim - When you take your automobile to be fixed at a shop or garage that is not part of the insurer's authorised network, a process for settling reimbursement claims begins. According to this process, the policyholder covers the repair expenses at the garage of their choice and then, based on the claim amount, the insurer reimburses them. The insurer deducts any relevant deductibles, including mandatory and optional (if opted for), and then reimburses the policyholder for the full amount of the claim.


In conclusion, there are a few things to consider when buying vehicle insurance in India. One of the most crucial parameters is the claim settlement ratio. It is preferable to get auto insurance online so that you may compare the many auto insurance providers and the quotations they provide.

Also Read: 

Best Car Insurance: Calculate Car Insurance Premium Online

Tips To Lower Premium For Car Insurance Policy


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.

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