A car-insurance claim settlement ratio is useful only when you know what its numerator, denominator and time period mean. For an Indian car owner, a meaningful comparison pairs that number with the policy wording, IRDAI's motor-claims data, the claim timeline and the insurer's complaint route.
This guide explains how to read the metric before renewal without treating a headline percentage as a promise that a future claim will be paid. The dated figures below use the latest FY 2024-25 sector data available in the IRDAI Annual Report and are stated as of October 2026.
Key takeaways
- A claim settlement ratio can be calculated by claim count or claim amount, and figures can also differ on whether they include claims closed without payment.
- IRDAI's FY 2024-25 motor incurred-claims ratio was 85.51% overall, but that is not the percentage of individual motor claims paid to drivers.
- Coverage, IDV, exclusions, deductibles, depreciation and the claims process often matter more to an individual payout than a sector-wide ratio.
- Under the 2024 policyholder-protection master circular, motor losses of ₹50,000 or more need a registered surveyor, with stated allocation, report and decision timelines.
- Keep a dated record of the claim, documents, deductions and complaint acknowledgement; the current rules provide escalation routes when service does not resolve the issue.
Why this question matters now
Motor-insurance buyers are looking beyond premium and claim settlement alone. A 30 October 2026 Business Today report described younger buyers comparing convenience, flexible cover, digital service and the repair journey alongside claim experience. That is a useful prompt for a lasting guide: the ratio is one piece of evidence, not a substitute for reading the contract.
A percentage is comparable only when its financial year, count-or-amount basis, denominator and business segment are the same.
First, separate the three numbers
1. Claim settlement or claims-paid ratio
This usually describes the share of claims paid, settled or otherwise decided during a period. The label is not enough: a count-based figure can make 95 out of 100 small claims look similar to 95 out of 100 large claims, even when the rupee experience is very different. Current reporting on IRDAI's proposed disclosure changes has also highlighted that insurers and products may use different definitions for claims decided, paid and closed.
- Ask for the exact formula and the financial year.
- Check whether the figure is by number of claims, amount paid or both.
- Check how pending claims, partial settlements and repudiated claims are treated.
2. Incurred-claims ratio
IRDAI defines the incurred-claims ratio as net incurred claims divided by net earned premium. It is a portfolio-level measure of claims cost against premium earned; it is not a promise that a particular repair bill will be paid and it is not the same as a claim settlement ratio.
3. Complaint and service indicators
Complaint share, grievance resolution time, surveyor allocation and the clarity of deductions describe the service path around a claim. They do not prove that every claim was valid or that every complaint was upheld, but they show why the headline ratio should be read with process information.
| Metric or checkpoint | Dated figure or rule | What it helps you understand | What it does not prove |
|---|---|---|---|
| Motor incurred-claims ratio | 85.51% for all sectors in FY 2024-25 | Claims incurred compared with net earned premium across the motor portfolio | The chance that your own claim will be paid |
| Sector comparison | 107.94% public-sector and 74.62% private-sector motor ICR in FY 2024-25 | How the portfolio-level claims-cost measure differed by sector | A ranking of individual claim service or policy value |
| Motor complaint share | 24.8% of total complaints in FY 2024-25, down from 26.18% in FY 2023-24 | How motor complaints featured in IRDAI's reported grievance mix | That 24.8% of motor claims were rejected |
| Motor claim assessment | Losses of ₹50,000 or more require a registered surveyor; allocation within 24 hours, report within 15 days and decision within 7 days of the report or 15 days from allocation, whichever is earlier | The process checkpoints in the 5 September 2024 master circular | A guaranteed payment or a fixed repair completion date |
The first three rows use IRDAI FY 2024-25 data and the Ministry of Finance's 16 December 2025 reply; the last row uses the 2024 master circular. These are sector or process figures, not a vehicle-specific quote.
What a high ratio can hide
A ratio is only a screening signal. The policy contract decides cover and settlement, so IRDAI consumer material highlights cover, exclusions, deductible, IDV and depreciation.
- Coverage mismatch: third-party liability does not pay for damage to your own car; own-damage cover and its conditions are separate checks.
- IDV and total loss: the insured declared value is relevant to theft and total-loss settlement, so a lower premium may be paired with a different payout basis.
- Deductions: compulsory excess, voluntary deductible, depreciation, salvage and excluded consumables can reduce the payable amount.
- Records: licence, registration, permit where applicable, declared use and policy validity can affect assessment.
- Repair route: cashless availability and the policy's repair procedure affect what you may pay first.
Use the car-insurance renewal quote comparison guide to put these fields side by side. The point is not to choose by a single percentage; it is to make each quote answer the same questions.
Worked rupee example: the same headline can mean different things
Consider this illustrative example, not a market statistic or a policy quote. Suppose 1,000 claims are available: 900 are paid, 50 closed, 30 rejected and 20 pending. A broad decided-claims calculation may show 95%, while a paid-only calculation shows 90%.
By amount, if those files total ₹1,00,00,000 and ₹72,00,000 is paid, the amount-based paid ratio is 72%. A customer with one ₹80,000 repair bill should therefore read the policy's settlement basis, not assume that a 95% count headline means ₹76,000 will be paid. In an illustrative claim calculation, an ₹80,000 admissible repair less a ₹1,000 deductible, ₹12,000 depreciation and ₹3,000 of excluded consumables would leave ₹64,000 before any other policy-specific adjustment. The actual figures depend on the policy, assessment and documents.
How to compare a car-insurance policy using the ratio
- Write down the definition. Save the ratio page or disclosure with the financial year, count or amount basis, denominator and treatment of pending or closed claims.
- Read the ICR separately. Treat the FY 2024-25 motor ICR as industry context, not as an individual approval probability. A sector result above 100% can occur because incurred claims exceed net earned premium; it is not automatically a claim-rejection score.
- Match the cover. Record third-party, own-damage or package cover, IDV, deductibles, add-ons, exclusions and policy dates. The policy-document reading checklist can help locate those fields.
- Compare the claim workflow. Note how the policy asks you to intimate a loss, who appoints the surveyor, what documents are directly relevant, how deductions are explained and which repair route is available.
- Check the vehicle records. Keep the registration certificate, driving licence, policy schedule, repair estimate and photographs consistent. A mismatch can create a dispute even when the insurer's headline metric looks strong.
- Read the complaint path. Record the insurer's grievance officer, email, acknowledgement method and escalation route. A useful comparison includes what happens when a claim is delayed or partly settled.
- Compare the total cost of cover. Put premium, deductible and likely out-of-pocket deductions next to the protection offered. Avoid calling a quote cheapest or best without a like-for-like cover comparison.
IRDAI claim safeguards and what to do if a claim stalls
The 2024 master circular says a surveyor should be allocated within 24 hours, submit a report within 15 days, and the insurer should decide within 7 days of the report or 15 days from allocation, whichever is earlier. It states that surveyor delay beyond 15 days attracts ₹500 per day for each day of delay.
- Intimate the insurer as early as possible and preserve photographs, estimates, receipts and correspondence.
- The circular says a claim cannot be rejected or closed merely for want of documents or delayed intimation; it also says the policyholder must provide documents directly related to the claim and cooperate with assessment.
- If the insurer proposes a deduction or rejects a claim, ask for the written calculation and the specific policy term relied upon. This is different from assuming that a high settlement ratio overrides an exclusion.
- For a service complaint, the master circular's retail-general-insurance section says the insurer should provide a resolution within 14 days. IRDAI's current Bima Bharosa FAQ says the insurance company should resolve a grievance within 15 days. Because the published references differ by one day, keep the dated acknowledgement and check the live regulator route when escalating.
- Bima Bharosa creates a token and lets the policyholder track the complaint. The master circular also describes an Insurance Ombudsman route for eligible unresolved complaints, including claims up to ₹50 lakh.
For common rejection issues, see the car-insurance claim rejection guide. Related decision guides are collected in the latest FuelPrice blog archive.
What to check before renewal
- Confirm the policy expiry date and save the current schedule and wording.
- Record the renewal quote's IDV, own-damage premium, third-party component, deductible and add-ons.
- Ask how the displayed claim ratio is defined and which financial year it covers.
- Compare the ratio with the claims workflow, surveyor communication, written deductions and complaint route.
- Check whether the selected use, registration details, declared accessories and driver information are accurate.
- Review exclusions that could affect flood, theft, engine, consumables, key, roadside-assistance or zero-depreciation claims.
- Keep a copy of the payment receipt, policy document and insurer contact details after renewal.
Frequently asked questions
Is a 98% car-insurance claim settlement ratio enough?
Not by itself. Ask whether 98% is based on claims paid, claims decided, count or amount, and whether the period and denominator match the comparison figure. Then compare cover, exclusions, IDV, deductibles, claims workflow and complaint handling.
Is incurred-claims ratio the same as claim settlement ratio?
No. ICR compares net incurred claims with net earned premium across a portfolio. A settlement or claims-paid ratio describes claims outcomes under a particular counting or amount method; neither number can replace reading the policy terms.
Can a motor claim be rejected for late intimation?
The 5 September 2024 IRDAI master circular says a claim cannot be rejected or closed for want of documents or delayed intimation. It still requires early intimation and relevant documents, and other valid policy conditions, fraud findings or a loss outside cover can remain relevant to assessment.
Where can I complain about a delayed or partly settled claim?
Start with the insurer's grievance officer and keep the acknowledgement. If the response is not acceptable or the insurer does not resolve the complaint within the applicable timeframe, use IRDAI's Bima Bharosa portal and retain its token for tracking; eligible unresolved matters may also go to the Insurance Ombudsman.
Sources
- Business Today, “Why are India’s young motor insurance buyers looking beyond claim settlement to seek greater flexibility?”, 30 Oct 2026 — reported trigger.
- Moneycontrol, “Will the insurance claim settlement ratio change? IRDAI proposes insurers show claim performance differently”, 24 Sep 2026 — reported proposal.
- IRDAI, “Annual Report 2024-25”, 30 Dec 2025 — annual report PDF.
- IRDAI, “Handbook on Indian Insurance Statistics 2024-25”, 03 Feb 2026 — official handbook page.
- Ministry of Finance, Press Information Bureau, “IRDAI Strengthens Regulatory Framework for Motor Insurance Claim Settlement”, 16 Dec 2025 — official release.
- IRDAI, “Master Circular on Protection of Policyholders’ Interests, 2024”, 05 Sep 2024 — regulator document.
- IRDAI Bima Bharosa, “Frequently Asked Questions”, accessed 30 Oct 2026 — current grievance FAQ.
- IRDAI, “Bima, Bemisaal: Consumer Awareness Booklet”, accessed 30 Oct 2026 — motor-insurance guidance.
- Wikimedia Commons, “Auto Damage Appraiser.png”, Wheelhouse1, 16 Mar 2014, CC BY-SA 3.0 — image source and licence.
This article is for general information only and is not financial, insurance or legal advice.
