Insurers try to avoid claims due to inaccurate details, delayed intimation

Hyderabad: Pursuing matters with auto insurance companies is a huge task like when a car is damaged, as these firms are setting rules that are not declared earlier.

The depreciation value of the car, its on-road value and also the actual damage incurred are matters of dispute which often lead to fights between the two parties. More than 10,000 cases are pending with 29 insurance companies, which are registered with the Insurance Regulatory Development Authority of India (IRDAI).

Suresh Kaavadu, a senior manager with an insurance company, explained, “In auto insurance, the model and type of vehicle are taken into consideration as also its value. Hence if the vehicle is 10 years old, the depreciation is first taken into account and that is the pre-accident value. On that basis, the claim amount is worked out. This often makes customers angry as they have paid the premium but not looked into the depreciated value.”

Infographic

A lot of sales of second-hand cars go on. The insurance of the first owner can be transferred to the second owner but it has to be notified. Often this is not done and in case of an accident it becomes a major cause of dispute between the two parties.

Rising disputes between the consumer and the insurance companies is due to the failure to communicate the actual facts vis-a-vis depreciation value, type of car and on-road price on the day of the accident. These facts are not clearly mentioned by the sales staff who are under pressure to meet the targets. This, it is argued, leads to a lot of dissatisfaction.

In 2014-15, IRDAI received more than a lakh complaints and some 10,000 of them are yet to be resolved. Also an increasing number of people are approaching ombudsman to settle their disputes which is faster. More than 20,000 cases of auto insurance have been taken up in this forum and the customers are satisfied with the settled claims.

Claim cases

Accident pictures lost
Mr B. Venkat had insured his Mahindra Maxx with National Insurance Co Ltd for 2009-2010. The vehicle met with an accident in 2009 and the rear end was badly damaged. Mr Venkat filed for insurance but the photographic evidence was lost, leading to a dispute. The company claimed that it had not received any evidence and rejected the claim. Mr Venkat produced the papers in the court and a compensation was granted. The company was pulled up for not maintaining records and had to also re-imburse legal expenses.

Insurance not transferred
Bhanu Prakash had bought a Maruti Esteem which was insured for a year from January 1, 2014. The car met with an accident in July, and he filed a claim '50,000. The insurer disputed the claim stating that he had not transferred the insurance in his name nor had he notified it. He moved consumer forum, which evaluated the damage at '30,000 and granted the complainant relief.

Third party insurance
Shanker, the son of Sadanand Mukhi, met with an accident while he was riding a two-wheeler owned by Mahesh Goud in Guntur in 2014. New India Assurance rejected Mr Goud’s claim saying a third party was riding the bike. The court ruled that in case of death of the owner or another passenger on the vehicle or a third party, compensation for the vehicle must be granted as it was an accident.