At one-time, cashless hospitalisation was a premium value-add. Today, it’s a primary expectation. It’s what makes insurance coverage usable in actual life. When it’s abruptly withdrawn, it’s us, the purchasers, who’re left greedy at skinny air throughout a medical disaster. The identical fragmented, conditional entry to cashless claims exists in motor cowl too. But right here, the problems are extra delicate.
Insurer issues
Motor cowl in India has two components. The first is Third-Party (TP) insurance coverage, which is obligatory underneath the legislation. It covers authorized legal responsibility in case your car causes hurt to others or their property. The second half is Own Damage (OD) insurance coverage, which covers the restore or substitute of your personal car if it’s broken or stolen. This is non-compulsory however extensively bought and, should you purchase each collectively, it’s known as a complete coverage.
Coming to cashless, it applies just for the OD half as it’s about repairs, however provided that you purchase the coverage from the correct supply!
New automotive consumers typically get insurance coverage bundled through the seller, due to tie-ups with particular insurers, brokers/brokers.
If there’s an accident, the declare course of is seamless with the repairs: you signal a couple of paperwork, and the authorised service centre takes care of every thing underneath a cashless association.
But should you select to purchase coverage from a distinct supplier — say, one which provided higher protection or pricing— chances are you’ll abruptly end up outdoors the cashless web.
The insurer may ask you to pay upfront and declare reimbursement later. In impact, entry to cashless service relies upon much less on the coverage and extra on the gross sales channel. It works nicely for the insurer, his gross sales channels and the automotive seller and maker. But not you!
Other nations
In many nations, this downside has been resolved in a sensible, consumer-friendly manner. Neutral trade our bodies or client associations certify and preserve a community of garages. These garages work with all insurers, underneath predefined contracts that standardise restore charges, high quality benchmarks, and even spare components preparations with producers.
Take the Automobile Association (AA) within the U.Okay., for instance. It performs a central position not solely in certifying garages and setting service requirements but additionally in providing insurance coverage merchandise and managing claims. The end result? Transparency, consistency and selection — no matter the place you purchase coverage. Similar preparations exist in lots of nations together with New Zealand and Australia. I’ve even seen it in Sri Lanka manner again within the mid-Nineties.
India’s missed probabilities
We do have car associations in India however they play solely a peripheral position, largely serving to with driving licences, RTO paperwork like deal with change and registration formalities should you purchase a resale car or promote your automotive to somebody in one other State.
Being a voluntary affiliation of auto house owners, it has immense untapped potential to:
- Act as an insurance coverage aggregator, serving to customers purchase insurance policies and handle claims;
- Certify and audit garages, guaranteeing standardised pricing and restore high quality;
- Negotiate with producers and insurers, creating really open networks for cashless repairs.
It would take away a number of ache factors without delay. Frankly the Indian car proprietor has no clue if a beneficial restore is important or pretty priced. Mechanics function in a trust-based vacuum. Standardisation might carry much-needed equity.
Fix the system
Whether it’s hospitals or garages, the cashless claims ecosystem at this time is a patchwork of closed loops, non-public preparations, and inconsistent service. At a time once we need all Indians to be insured, this fragmentation is now not sustainable.
We urgently want regulatory readability from IRDAI on standardising and guaranteeing cashless entry throughout sectors; stronger client illustration, maybe through revamped car associations or new third-party aggregators. The car inhabitants in India is exploding. Hospital prices are rising. Insurance is now not a luxurious—it’s a necessity.
But with out a purposeful, reliable, and clear claims course of, insurance coverage fails on the one second when it’s purported to ship. It’s time to carry some sanity again into the system.
(The author is a enterprise journalist specialising in insurance coverage and company historical past)
Published – October 13, 2025 06:12 am IST
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