Unexpected events may happen any time and there is no frequency of happening or non-happening of any event because life is unpredictable. We can take precautionary measures and ensure our safety. Unexpected events may happen once or in a series to anyone such as natural calamities and theft and multiple accidents or any incidents one after another in a period of time. You may need repairs to the car and have to file a claim with your insurance company. But will the insurance company accept multiple claims and will it affect your future insurance claims. Here in this article, we discuss the insurance claims so that you are prepared for what to do if you have to make any claims.
An Insurance policy goal is to roll out the losses of a few among many. There are no restrictions on the number of claims that you make to the insurance company. You can claim insurance multiple times in a year. Insured Declared Value is the maximum amount paid by the company to the policyholder. Your insured declared value (IDV) may or may not get affected depending on the terms and conditions. However, there are some aspects that you should know about in claiming the insurance multiple times.
- There are no restrictions on the number of claims you make to the insurance company in a year.
- If the insurance policy holder makes continuous claims then it will be noted in the customer claim history and this will make the insurance company increase the renewal premium amount.
- Zero depreciation insurance can be claimed for the first 2 times and from third claims insurance payments are made through a comprehensive basis.
- If the policyholder makes adverse insurance claims the insurance company can impose curtailments on future renewals. The insurance company has an option to cancel the insurance policy and provide a refund of premium through the pro-rata method with prior notice.
- If the policyholder does not make any claim during the policy period then the insurance company will pay no claim bonus.
The types of claims and the frequency that you make insurance claims matters a lot. The amount of claim, the cause of a fault, and other reasons are assessed by the company. If the owner is negligent and has the intention to get benefit from the insurance policy is also noted by the insurance company. It is important to note that insurance companies provide coverage for any mishappening events but are not pleased with the negligent acts of the policyholder or driver.
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How to reduce multiple insurance claims?
You can reduce multiple insurance claims by following the below practices.
1. Be Cautious
Do not drive when you are distracted, do not commute in bad weather conditions, and always park your car in a safe place or in a carport. Keep your car in good condition.
2. Pay for affordable expenses
Nobody wants to pay for damages out of pocket but sometimes it is the cheapest and the best option as you can deal with one claim at a time. Analyze and evaluate the expenses you are paying yourself and the amount you are filing for claims. Think of long term benefits and make claims because making multiple claims in less period could alert the insurance company and mark you as a high-risk customer.
3. Consequences of making false multiple insurance claims
For any genuine reasons insurance companies do not take any actions but making multiple insurance claims in a short period of time and intending to get the undue advantage of insurance benefits will make the company work against the insurance policyholder.
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4. Insurance companies terminate the policy
Making false claims and misrepresenting the facts will make the company to cancel the policy. Within 60 days the company can cancel the policy of the insurance holder for providing false information and misrepresentations. After 60 days the company can cancel the policy for non-compliance, fraudulent claims and non-payment of premiums. Filing multiple insurance claims will not result in canceling the insurance policy until claims are not a fraud.
5. Insurance companies refuse to renew policy
Insurance companies refuse to renew the policy and drop the policyholder. There are multiple reasons insurance companies will not renew the policy. If there are any legal actions taken on the policyholder and pending legal litigations. The company will not renew the insurance policy.
Takeaway
There are no restrictions on the number of insurance claims that you can make. The insurance company will not cancel the policy for making frequent claims. However, the insurance company can raise the amount of insurance premiums or decide to not renew policy during renewal time. As a best practice take some precautionary measures ensuring the safety of your vehicle and yourself. Plan your trips considering the weather and your driving conditions. It is your car so ensure all safety to it and the rest of the protection will be provided by the insurance company.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
