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Cashless vs reimbursement claims: what is the difference
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Introduction
When your car needs repair after an accident, your insurer gives you two ways to settle the bill. In a cashless claim, the insurer pays the garage directly. In a reimbursement claim, you pay first and the insurer pays you back. Both are legitimate. Knowing which one suits your situation can save you time, money, and stress.
In this blog, we are going to cover what each claim type actually means, how the process works step by step, which situations each one suits, the documents you need to keep ready, and what makes a cashless claim faster with the right insurer.
Keep in mind
A cashless claim means the insurer settles the repair bill with the garage, you do not pay out of pocket
A reimbursement claim means you pay the garage first and then raise a claim to get the money back
Cashless claims are available only at garages on your insurer's partner list, called cashless partner garages
Reimbursement claims give you the freedom to choose any garage, even one not on the partner list
Both claim types deduct the compulsory deductible and any depreciation unless you hold a Zero Depreciation cover optional cover
What is a cashless claim
A cashless claim lets your insurer pay the repair garage on your behalf. You do not have to arrange the money yourself. The insurer and the garage settle the bill between themselves.
Here is how the process works
- 1
Go to a partner garage
You take the car to a cashless partner garage, a workshop on your insurer's approved list
- 2
Garage raises an estimate
The garage checks your policy details and raises a repair estimate
- 3
Surveyor approves it
The insurer's surveyor inspects the car and approves the estimate
- 4
Repairs begin
Repairs begin once approval comes through
- 5
You pay the deductible
You pay only the compulsory deductible, ₹1,000 for cars up to 1,500cc (such as a Honda City or a Hyundai Verna) and ₹2,000 for cars above 1,500cc, plus any uncovered items
- 6
Garage claims the rest
The garage claims the rest directly from the insurer
The biggest advantage here is that you do not have to put up a large sum of money upfront. This matters when the repair bill runs high, for example, after a collision or hail damage.
The Compulsory Personal Accident (PA) cover of ₹15 lakhs for the owner-driver is separate from the Own Damage (OD) claim process and does not affect how you choose between cashless and reimbursement.
What is a reimbursement claim
A reimbursement claim works the other way around. You pay the garage directly, then raise a claim with the insurer. The insurer reviews your bills and pays you back the approved amount.
Here is how the reimbursement claim process usually works
- 1
Repair at any garage
You get your car repaired at a garage of your choice, it does not have to be on any approved list
- 2
Pay and keep the bills
You pay the full repair bill at the garage and collect all original invoices and receipts
- 3
Raise your claim
You raise a claim with the insurer and submit the documents
- 4
Surveyor reviews the bills
The insurer's surveyor reviews the bills and the damage assessment
- 5
Insurer approves the amount
The insurer approves the reimbursable amount, after deducting the compulsory deductible, depreciation (if you do not hold Zero Depreciation cover), and any non-covered items
- 6
Money reaches your account
The approved amount is transferred to your bank account
The time between paying the garage and receiving your money depends on how quickly you submit the paperwork and how long the insurer takes to process it. Having everything ready speeds things up.
Cashless vs reimbursement claim: a side-by-side look
For car insurance, the main difference is who pays the garage first: with a cashless claim, the insurer pays the approved repair amount directly to a network garage; with a reimbursement claim, you pay the garage first and claim the eligible amount from the insurer later. Here's a more detailed comparison between the two.
When should you choose a cashless claim
A cashless claim works best when a cashless partner garage is conveniently located and when the repair bill is likely to be large.
Choose a cashless claim when:
The damage is significant
The damage is significant, a cashless process means you do not have to arrange a large sum before the car is fixed
You want less paperwork
You want to avoid paperwork, the garage coordinates with the insurer directly, so fewer documents pass through your hands
A partner garage is nearby
A cashless partner garage is nearby, most insurers list hundreds of partner workshops, and many cities have good coverage
You want a simpler process
You want a simpler claims process, where the insurer can approve the repairs with the garage before the work begins, and make the payment process easier.
Check your insurer's partner garage list before taking your car for repairs. Cashless claims are available only at eligible network garages. If you use a non-network garage, you may need to pay for the repairs yourself and claim the eligible amount later.
When does a reimbursement claim make sense
A reimbursement claim is the right call in situations where a cashless partner garage is not available or not your preference.
Choose reimbursement when:
No partner garage nearby
The accident happens in a location without nearby cashless partner garages, rural highways and remote towns often have limited network coverage
A garage you trust
You trust a specific garage, a family mechanic, a brand-authorised service centre not on the partner list, or a specialist for your car model
A minor repair
The repair is minor and you have the cash available, the paperwork is straightforward for small bills
A roadside emergency
The car needs immediate repair on the roadside and there is no time to locate a partner garage, you can raise the claim after the fact
Keep all original bills, the repair estimate, and the invoice from the garage. Insurers do not accept photocopies or screenshots as primary evidence.
Documents you will need for each type
For a cashless claim
• Copy of your insurance policy document • Your driving licence • Car registration certificate (RC) • First Information Report (FIR), required if the damage involves a third party or theft • Photographs of the damage taken at the scene
For a reimbursement claim
• All of the above • Original repair invoice from the garage, with GST number, garage name, and itemised breakdown • Original payment receipts, cash receipt or bank transfer confirmation • Repair estimate given before work began (if the insurer asked for pre-approval) • Bank account details for the reimbursement transfer
Note: Photograph every document before you hand over the originals anywhere. A lost original can delay or reduce the approved claim amount.
What Kiwi Insurance does differently
The claims experience is not just about how you pay for repairs. With Kiwi Insurance, you also have a dedicated Claims Specialist who stays with you through the claims process and acts as your single point of contact.
You get the following benefits exclusively with Kiwi:
- Only with Kiwi
Dedicated Claims Specialist
One person handles your claim from start to finish, coordinates with the surveyor and garage, and keeps you updated throughout.
- Only with Kiwi
Kiwi PayFirst
At an eligible cashless partner garage, the approved claim amount is paid to the garage before you pay your share, so you do not have to arrange the full repair amount upfront.
- Only with Kiwi
Kiwi InstaCash
Helps you receive payment for eligible minor damage claims faster, reducing the wait after raising a claim.
If you want to know which cashless partner garages are in your city, head to our network garage page before you book the car in.
Conclusion
The main difference between cashless and reimbursement claims is who pays the garage first. A cashless claim can make the payment process easier, while reimbursement gives you more flexibility in choosing a garage.
The right option depends on your situation, including where the accident happens, the repair cost and the garage you want to use. With Kiwi Insurance, a dedicated Claims Specialist guides you through the claims process and helps you understand what to do next.
Head to Kiwi Insurance to check your policy, find a cashless partner garage near you, or raise a claim in minutes.
Written by
Reuben Solomon
Lead Content Writer
Reviewed by
Rupinderjit Singh
Head - Tech Product & Digital Business
Frequently asked questions
A cashless claim means your insurer pays the repair garage directly. You do not have to pay the full bill out of your own pocket. You only cover the compulsory deductible and any items not included in your cover. The insurer and the cashless partner garage settle the rest between themselves.