Cashless Car Insurance

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About Cashless Insurance Policy

A cashless insurance policy, first introduced in the health insurance domain, allows a policyholder to avail services covered under the policy without having to pay for them out of pocket. The insurance provider has a tie-up with the service provider and pays for the approved services directly to the service provider.


Cashless insurance has grown in popularity over the years, and has been introduced in asset insurance domain as well. It has emerged as the preferred mode of settlement for motor insurance. Cashless settlement need a quick turnaround as the claim has to be approved before the service is delivered. If it takes too long to approve, the claim may be converted to a reimbursement claim.

What is Cashless Car Insurance Policy

A cashless car insurance policy allows the policyholder to get their car repaired at any of the network garages without paying anything out of their pocket. The bill for the repairs is sent directly to the insurer and the monies paid out to the garage. A cashless reimbursement is the fast, easy and hassle-free for the policyholder.


That said, the deductibles apply to cashless settlement as well. You will have to pay the compulsory deductible of Rs 1,000 or Rs 2,000 based on the cubic capacity of your car. If you have opted for any voluntary deductible, that would also be paid for by you. The insurance policy will only pay the remainder.


Further, if any of the damage is not covered by your car insurance policy – you will have to pay for them out of your pocket. For example, many basic car insurance policies do not cover water damage to the engine.

How Cashless Motor Insurance Policy Work?

Most insurers in India have tied up with garages around the country to provide cashless car repair services. The insurer would provide you with a list of such authorised garages – called network garages – along with the policy documents. You would be able to locate the garage closest to you by either checking with your insurance agent, or calling up the toll free number provided by your insurer.


If the car sustains any damages in an accident, you can choose to get the repairs done in a network garage. Inform the insurer about the damage as soon as possible. At the garage, along with your car also handover the details of your car insurance policy so that the garage can initiate the process of cashless claim settlement. The insurer may inspect the car before approving the cashless settlement. Once the claim is approved, the repairs would be carried out and the bill is sent to the insurer directly.


While the most of the bill will be paid for by the insurer, you would have to bear the cost of any deductible, and the depreciation cost of any parts replaced. You could avoid paying the depreciation charges if you have the zero depreciation add-on cover as well.

What Is Depreciation In Car Insurance? 

Depreciation is defined as the reduction in value of an asset over time. This reduction is in particular due to wear and tear. With respect to car insurance, two kinds of depreciation come into play – the depreciation of the car itself and the depreciation of various car parts and car accessories.


When you file a claim against your car insurance policy, the insurer typically deducts the depreciation cost before making the payment. The Insurance Regulatory and Development Authority of India (IRDAI) has set rules for how the depreciation should be calculated. These rules are applicable regardless of how you use your vehicle. The same are listed below:

  • 50% Depreciation on Nylon, Plastic Parts, Rubber Tyres and Tubes, Air Bags and Batteries
  • For Car paint, 50% Depreciation on the Material Cost of the paint
  • 30% Depreciation for Fibreglass
  • For other parts including wooden parts, depreciation depends upon the age of the car as per the table below

Vehicle Age

% Depreciation

Less than 6 months


6 months – 1 year


1-2 years


2-3 years


3-4 years


4-5 years


5-10 years


Greater than 10 years



The depreciation in the overall value of the car is calculated based on the below schedule. If the car is older than 5 years, the insured declared value is arrived at by mutual agreement between the policyholder and the insurer.

Age of Vehicle

% Depreciation for adjusting IDV

Up to 6 months


More than 6 months but under 1 year


More than 1 year but under 2 years


More than 2 years but under 3 years


More than 3 years but under 4 years


More than 4 years but under 5 years



What Is A Deductible In Car Insurance?

A deductible is the part of the insured expense that you have to pay out of your pocket before the insurer pays for the rest. In case of car insurance, deductibles are usually applied on a per claim basis. For instance, if you file a claim for damages worth ₹15,000 and the deductible is ₹1,000 – the insurer would only provide for ₹14,000.


Higher the voluntary deductible you opt for, lower will be the car insurance premium charged. But remember that a higher voluntary deductible results in a larger amount to be paid out of your pocket during a loss event. Therefore, you should carefully choose a deductible that you are comfortable paying out of pocket.


When deciding the amount of voluntary deductible, consider how much would you be able to pay without it having an impact on your other expenses. Your household budget, your income, your saving plan and also your access to credit, all play a role in this decision.

Compulsory deductible

With this kind of deductible, the policyholder has no choice but to pay a part of the motor insurance claim. IRDAI regulations have fixed the value of compulsory deductible in car insurance based on the cubic capacity of the car engine. At present, it is set at ₹1,000 for cars with a cubic capacity up to 1500cc, and at Rs 2,000 for greater cubic capacity. The compulsory deductible does not have any impact on the car insurance premium. Compulsory deductible is only applicable for comprehensive car insurance, and not to third-party liability only car insurance policies.


Voluntary deductible

A voluntary deductible is the amount that would have been paid by the insurer under usual conditions, but you selected to pay it out of your pocket. Choosing to have a voluntary deductible added to your insurance cover brings down your car insurance premium significantly. This is because the risk that the insurer is exposed to is lowered when the insured opts for voluntary deductible.


You will have to decide on how much you are willing to pay out of your pocket at the time of policy proposal itself. The deductible would be applied to every claim you file in the policy period. The insurer will only pay the part of the claim amount that is above the total voluntary and compulsory deductible.

What is a network garage?

A network garage is a garage that has entered an agreement with an insurer to provide cashless car repair service to a policyholder of the said insurer. Insurers considers the following abilities when selecting garages to join their network:

  1. Honest and fair service
  2. Transparent pricing
  3. Ability to deliver services covered by the insurance product offered
  4. Initial estimates provided on the expense must be reasonably accurate
  5. A well-trained suit of mechanics
  6. Ability to address customer complaints in an agile manner.

How to get cashless garage facility?

To get access to a cashless garage facility, all you need is to get a comprehensive car insurance policy from a reputed insurance company in India. Before purchasing the insurance policy check the list of the network garages provided by the insurer to check that you have garages near where you may need servicing.

Benefits of cashless claim facility

Stress free

The greatest benefit from having access to a cashless claim facility is that you do not have to worry about how to get your car repaired. Just take it to the nearest network garage, and everything will be taken care of. You only have to pay the compulsory and voluntary deductibles.

Quick and hassle-free

Most insurers have a large number of garages and service centres in their network, allowing you to find one near you. The process of filing the claim is simple and takes just a few minutes.

No need for cash

If your car sustains damage in an accident, the repairs can cost quite a bit. With a cashless garage facility, you don’t have dip into your emergency cash reserve for the repairs. Just find the closest authorized garage and you can get your car repaired at a minimal expense out of your pocket.

Steps To Be Followed To Make A Cashless Claim

Follow the below steps to make a cashless claim:

  1. Inform the insurer about the accident as soon as practical. Call the claim intimation number provided by the insurer and get the details of the authorized garage near you.
  2. In case you need a towing service, the insurer would arrange for the same.
  3. Submit the duly-filled claim form along with any requisite documents to the insurance company. You should be able to do this at the network garage as well.
  4. The insurer would appoint a surveyor to inspect the car and assess the damage.
  5. In case of a major accident, the surveyor may want to inspect the site of the accident as well.
  6. Post the inspection, your insurer would inform the garage once the claim approved.
  7. The garage would make the repairs and submit the invoice directly to the insurer.
  8. The insurer would make the requisite payments after deducting the depreciation costs of any car parts/accessories replaced.
  9. If the insurance company finds that the cost of repair is significantly high compared to the insured declared value, they may choose to write it off as a total loss and pay out the IDV to you instead.

Why Bharti AXA for Cashless Car Insurance

When you buy an insurance cover from Bharti AXA General Insurance, you join a family of over a millions satisfied customers. You can reach out to our team any time of the day, from anywhere in the country for assistance with your car insurance policy. You just make a call to our numbers and we would guide you through the simplified claims process to ensure that the settlement happens as soon as possible.


You also get access to our vast network of cashless garages, allowing you to get your car repaired without having to shell even a single rupee from your pocket. The claims are settled in a completely hassle-free manner and the payment made directly to the garage. Our strong online presence allows you to not just buy and renew policies online, but you can also file claims completely online making the process much simpler than ever before.


Bharti AXA General Insurance also offers a large bouquet of add-on covers through which you can customize your coverage to your specific requirements.


Do I need to pay for any damages OR company will pay the entire claim directly?

The company would pay the claim amount in accordance with the policy terms and conditions. You will have to bear the cost of depreciation and also pay the deductibles agreed upon.

What excessive charges you need to bear as a part of claim?

Cost of any repairs beyond what is covered by your comprehensive car insurance policy have to be borne by you.

How to find cashless garages in my city?

The insurer would provide you a list of all the cashless garages they have an agreement with. You can also call up the toll free number provided by your insurer to find out the cashless garage near you.

What if I am unable to find any cashless garage near by my location?

If you cannot access a cashless garage, you will have to pay for the repairs out-of-pocket at any garage of your choice. Your insurance company will reimburse the cost of repair after verification.


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