The Car Insurance Claim Rule in India is getting a significant overhaul in 2025, and if you’re a vehicle owner, these changes matter more than ever. The Insurance Regulatory and Development Authority of India (IRDAI) has introduced new policies aimed at increasing transparency, streamlining claim processes, and ensuring quicker settlements. These rules not only impact personal accident and damage claims but also extend to Third Party Claim 2025 protocols. Here’s a deep dive into what’s new and how it could affect you.
Faster Claim Settlement Mandate
One of the headline updates to the Car Insurance Claim Rule is the mandatory claim settlement timeline. Insurers are now required to settle motor insurance claims within seven working days from the receipt of all necessary documents. This is a major step forward, as earlier timelines were often ambiguous, leading to unnecessary delays.
For policyholders, this means faster compensation for both own-damage and third party claims. In cases of non-compliance, insurers may face financial penalties or regulatory action.
Example: If you file a claim for a car accident on a Monday and submit all paperwork the same day, your insurer must process and release the settlement by the following Tuesday (excluding weekends and holidays).
Simplified Documentation Process
The 2025 update has also trimmed down the list of required documents. Policyholders no longer need to submit physical copies of their policy documents, registration certificate (RC), or driving license if these can be verified digitally through official databases like Digilocker or VAHAN.
What’s Changed:
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Video evidence is now accepted in addition to photos.
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FIR is no longer mandatory for minor accidents or own-damage claims below ₹50,000.
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Third-party claims can now use e-FIRs submitted online.
This shift to digital not only simplifies the process but also reduces fraud and minimizes errors during manual verification.Introduction of AI-Based Claim Assessment
Insurance companies are now encouraged to deploy AI-driven tools to assess damage through uploaded images or video footage. This means fewer site visits and faster claim evaluations, particularly for minor damages.
Some insurers are already piloting apps that can estimate repair costs within minutes of uploading visuals. This not only speeds up the process but also helps reduce disputes between insurers and garages.
Revised Rules for Third Party Claim 2025
The IRDAI has also revised the rules for Third Party Claim 2025 to address long-standing bottlenecks in compensation cases involving injuries or fatalities. Here’s what’s new:
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Fixed timelines for claim adjudication by Motor Accident Claim Tribunals (MACTs).
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Insurers must make interim payments to victims or their families within 30 days of a claim being filed.
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Use of Aadhaar-linked bank accounts for direct transfer of compensation to avoid delays.
Impact: Victims of road accidents or their dependents will no longer have to wait months (or years) for relief. The move is aimed at making third-party claims more humane and efficient.
Cashless Garage Network Expansion
Insurers are now required to expand their cashless garage networks in all major cities and towns. A minimum of 500 cashless garages must be enlisted per insurance provider, ensuring easier access to quality repairs without upfront payments.
Also, insurers must provide real-time updates on claim status, repair timelines, and service ratings of garages—enabling customers to make informed decisions.
Penalties for Delayed or Denied Claims
A strong deterrent has been introduced for insurers who delay or unfairly reject claims. If a valid claim is delayed beyond the 7-day window, a penal interest of 2% above the prevailing bank rate will be applied, payable to the policyholder for each day of delay.
This provision adds serious accountability and encourages fair practices in the claim settlement process.
Inclusion of Electric Vehicles (EVs) in Special Clauses
With India pushing for EV adoption, the new Car Insurance Claim Rule framework introduces specific provisions for EVs. These include:
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Separate guidelines for battery damage assessment.
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Tie-ups with certified EV repair centers.
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Higher depreciation caps due to evolving technology.
This helps reduce the uncertainty around insurance claims for electric cars and encourages more people to make the switch.
FAQs – Car Insurance Claim Rules 2025
Q1. What is the new time limit for settling a car insurance claim in 2025?
Insurers must settle claims within seven working days from receiving all necessary documents.
Q2. Is FIR mandatory for filing a car insurance claim?
No, FIR is not required for own-damage claims under ₹50,000. However, for serious third-party incidents, an FIR or e-FIR is still essential.
Q3. How do the new rules impact third-party insurance claims?
The Third Party Claim 2025 rules ensure faster compensation, interim payouts, and quicker tribunal resolutions for accident victims.
Q4. Are there any benefits for EV owners under the new rules?
Yes, special clauses cover EV-specific damages like battery failure, and insurers must work with certified EV garages for repairs.
Q5. What happens if an insurer delays the claim settlement?
They must pay penal interest of 2% above the standard bank rate for every day of delay.
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