Claims settlement is undoubtedly a crucial parameter that plays an important role when buying four wheeler insurance. It is a facility provided by the insurance company through which it compensates the policyholders after they are subject to an unforeseen accident.
So, whether you are purchasing comprehensive or third party insurance, it is important to consider its claim settlement process when choosing the right type of insurance for cars.
There are two types of claims settlement process: reimbursement claim settlement and cashless claims settlement.
Note that both settlement types have their own features. If you are confused about which claim settlement method is better, this blog is for you. We will discuss all the differences between the cashless and reimbursement claim settlement process to help you make an informed decision.
What is Cashless Claims Settlement and How it Works?
Cashless claims settlement is a claims settlement process that does not require the policyholder to pay for the repair cost of their vehicle from their pocket after an accident. Instead, they can get it repaired in a cashless way at a garage that the motor car insurance company empanels.
In simple terms, your car repair/replacement bills are directly settled by your insurer at their network garages. Here is how cashless claims settlement works after you get your vehicle repaired at a network garage:
- Step 1: Visit your insurance provider’s website.
- Step 2: File a cashless claim by filling out an online form.
- Step 3: Your insurance company will send their professional to assess your vehicle and verify the claim.
- Step 4: Once approved, the company will reimburse the repair cost to the said garage without requiring your involvement.
Features of Car Insurance Cashless Claims Settlement
- No need to pay from your wallet.
- The insurance company directly deals with the garage.
- Short waiting period for reimbursement.
- Easy and convenient
What is the Reimbursement Claim Settlement Process and How it Works?
This is a conventional way of settling the claims raised by policyholders. In this method, you have to pay for your vehicle’s repair/replacement cost, which is reimbursed by the insurance company later. In other words, first, you get your car repaired at any garage of your choice and then submit the signed bills to your insurer for reimbursement. Here are the steps for the reimbursement claims settlement process:
- Step 1: Inform the insurance company about the accident and necessary repairs.
- Step 2: The insurance company will assess the damage and check the authenticity of the claim.
- Step 3: Once a claim is approved, you can get your car repaired at a non-network garage and submit the invoices to the company.
- Step 4: The company will reimburse the total amount after verifying the signed bills.
Features of Car Insurance Reimbursement Process
The following are the features of the conventional reimbursement process:
- The insurance holder makes initial payments.
- Reimbursement takes time.
- Requires more paperwork.
- The insurance holder has to deal with the garage.
Cashless Claims Settlement Vs Cash Reimbursement Process: Which is Better?
A cashless claim settlement process is simple, convenient, and saves you from the hassle of a long settlement process. When you opt for a cashless claim settlement, you don’t need to pay anything to get your car repaired after an unprecedented accident.
However, in reimbursement claim settlement, you must bear the expense for all the repairs or replacements made to your vehicle. In other words, it can pose a financial burden on you. For these reasons, cashless claim settlement is a better choice.
Not to mention, the cashless claim settlement process is easy and fast and offers added convenience. In this process, you don’t have to rush towards arranging funds for repair. Simply put, you can take your car to one of the network garages of your insurer and let them deal with the expenses.
On the other hand, reimbursement claim settlement takes more time as you need to collect multiple repair documents from a non-network workshop and submit them to the insurer to get reimbursed.
Cashless car insurance is a better option than reimbursement claim settlement because of its ease and convenience. It also saves the insured from the initial financial burden by allowing them to get cashless repair services from a network garage. Thus, whether you buy a comprehensive or a third-party car insurance policy, make sure it offers a cashless claim settlement option.