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Cashless Motor Insurance – A Boon or A Bane?

By Deepak Yohannan

Cashless Motor Insurance – A Boon or A Bane?
Much like health insurance, motor insurance also has provisions for cashless facilities. With a lot of offers in store and attractive features, insurance companies draw customers towards these policies.

But exactly how helpful is cashless motor insurance? Does it help you or do you end up being more hassled because of this? With both pros and cons, cashless motor insurance is a service that has a lot to offer. Take a quick look at this article to understand how exactly cashless motor insurance works and whether it will be useful for you or not.

What is cashless motor insurance?

If you have a cashless insurance policy, you can get your car repaired at any of the listed garages and the insurance company will pay the bill on your behalf. So technically you do not need to spend a single paisa. All you have to have to do is inform the insurance company about the damages, hand over the documents to the garage and then just wait for your car to get fixed.

How does it work?

Insurance companies have tie-ups with certain garages. As part of the agreement, the garage repairs your car and then forwards the bill to the insurance company. After assessing the bill and verifying the details, the company disburses the payment to the garage. So you do not end up paying anything at the garage. However, if there are damages to parts that are not covered under the policy (accessories, engine, etc), then you will have to bear the charges. Only if the insured portions of the car are damaged, can you claim a cashless service.

Which garage to go to?

Let's take an example. Mr. Yadav meets with an accident on his way to office. In the middle of the road, his car is damaged and he cannot even get the engine to start. With the help of passersby, he pushes the car to the nearest garage, which luckily is just a few meters away. After a lengthy procedure, the car is finally ready to be delivered to Mr. Yadav. When he calls up his insurance company to inquire about the cashless facility, he is told that he wouldn't be eligible for it since the garage is not linked with the insurer.


Just like Mr. Yadav, you also must be wondering as to how a person, in need to shift his damaged car away from the busy interjection, can remember and figure out the list of linked garages? Well, this is a very valid point and also a problem that many customers face. You can only avail the cashless facility if you go to any one of the garages listed by your insurance company. Most insurers send you a list and also display the details on their website. However, this proves to be a huge disadvantage for people in urgent need of repairing their cars. If the repair can be postponed for later, then the choice of garage makes sense.

So cashless motor insurance, though a useful service, proves to be impractical at times. As a result, most people opt for the reimbursement claims. Under this system, you have the liberty to get your car repaired at any garage. All you have to do is send the bill, after making the payment, to the insurance company and they will reimburse you. However, cashless motor insurance helps a lot during planned repairs. So asses your needs and select the motor insurance plan that will prove to be beneficial for you.

The author is the CEO of, an online insurance price & features comparison portal.

Read more about: insurance
Story first published: Saturday, March 16, 2013, 10:20 [IST]
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