When you purchase a car insurance policy, you expect the insurance company to be there for you in case of any unfortunate event. But how do you know if the insurance company is reliable and trustworthy? This is where the claim settlement ratio comes into play. In this article, we will discuss the claim settlement ratio in detail and its importance in selecting a car insurance policy.
What is Claim Settlement Ratio?
Claim settlement ratio is the ratio of claims settled by an insurance company to the total claims received by the company. It is an important parameter that indicates the reliability of the insurance company in settling claims. A higher claim settlement ratio indicates that the insurance company settles claims promptly and efficiently.
How is Claim Settlement Ratio Calculated?
The claim settlement ratio is calculated by dividing the total number of claims settled by the insurance company in a financial year by the total number of claims received by the company in the same period. The ratio is expressed as a percentage. For example, if an insurance company settles 800 claims out of 1000 claims received in a year, the claim settlement ratio will be 80%.
Why is Claim Settlement Ratio Important?
The claim settlement ratio is an important parameter that helps you assess the reliability and credibility of an insurance company. A higher claim settlement ratio indicates that the company is prompt in settling claims and has a good track record of customer service. It gives you the confidence to choose the insurance company as your preferred insurer.
Factors that Affect Claim Settlement Ratio
There are many factors that can affect the claim settlement ratio of an insurance company. Some of the most common factors are:
- Claims Process: The claims process followed by the insurance company can have a significant impact on the claim settlement ratio. If the company has a streamlined and efficient claims process, it is likely to have a higher claim settlement ratio.
- Customer Service: The level of customer service provided by the insurance company can also affect the claim settlement ratio. If the company has a good track record of customer service, it is likely to have a higher claim settlement ratio.
- Financial Stability: The financial stability of the insurance company is another important factor that can affect the claim settlement ratio. If the company is financially stable, it is more likely to settle claims promptly and efficiently.
- Type of Insurance Policy: The type of insurance policy also plays a role in determining the claim settlement ratio. For example, a company that specializes in motor insurance is likely to have a higher claim settlement ratio for motor insurance claims.
How to Check Claim Settlement Ratio?
Checking the claim settlement ratio of an insurance company is easy. You can visit the website of the Insurance Regulatory and Development Authority of India (IRDAI) and check the claim settlement ratio of different insurance companies. The IRDAI publishes the claim settlement ratio of all insurance companies in India on its website every year.
Importance of Choosing the Right Insurance Company
Choosing the right insurance company is important to ensure that you get the best coverage and prompt settlement of claims. A reliable and trustworthy insurance company can provide you with peace of mind and protect you from financial losses in case of any unforeseen event.
Conclusion
The claim settlement ratio is an important parameter that helps you evaluate the reliability and credibility of an insurance company. It gives you the confidence to choose the insurance company as your preferred insurer. When choosing a car insurance policy, it is important to consider the claim settlement ratio along with other factors such as coverage, premium, and customer service. Always choose a company with a high claim settlement ratio to ensure prompt and efficient settlement of claims.
