This section covers the scope for guidance, education, consultancy services to customers, surveyors, salvage buyers, Repairers, Dealers and Insurance companies on Auto insurance matters. It also includes the scope for detection and prevention of auto insurance/claims fraud.
The vehicles may be private cars, office cars, commercial vehicles like Goods carrying trucks or passenger carying buses, special purpose vehicles like fire brigade, ambulances and agricultural sector and lastly - special sports vehicles. In addition there could be 3 wheelers (tempos), scooters and two wheelers like motor cycles.
The corporates normally have many vehicles in a fleet running into hundeds or thousands of vehicles. These are insured in a group with the insurance company for a year and are renewed regularly. They attract a heavy discount for numbers.
There are many discounts available for favourable features which reduce the risk. These include no claim bonus, voluntary exit,embedded devices, types of use, membership of Automobile Association and for use of airbags and anti-theft devices.
Extras are charged for features/sectors which increase the risk of the insurance company. The factors are - high claim ratio, bad moral hazard, special purpose vehicles and area of use of vehicles.
In all there are about 28 non-life insurance companies operating in India today. Almost all of them are issuing motor policies. Their premium rates are different.
Motor policy is a legal document. It has to be duly stamped and signed. Motor certificate is issued as a proof of insurance coverage. Temporary cover notes are issued for a period of 15 days(max twice). Incase motor policy cannot be issued immediately for administrative reasons. There are 3 types of endorsements - extra, refund and nil. Depending on changes in premium. Clauses and policy conditions are legal part of insurance contract.
Policies can be issued in the office through computers or it is also a practice to give online policies these days.
Normally policies are issued through agents, brokers, bank assurance arrnagements. In addition to these three intermediares policies can be issued online or through direct code of the company.
Yes. He can purchase policy online in which case commission amount will be deducted from the premium charged. Hence it is cheaper.
The following Documents are required for purchasing policy for a new car
1) Invoice of Car.
2) Temporary RC.
3) Physical inspection report of Car by Agent / Broker.
* Mostly these are provided at the time of Purchase by Dealer himself.
It is the practice in India that government properties including automobiles are not insured. However, if government changes its rules, the insurance companies will have no objection to do this.
Yes. These are insured at special rates of premium because the risk increases.
It is not available in India easily though there is a great demand for it.
It will depend on circumstances of individual cases.
The insurance is taken by Karta who is head of the family. He fills up the proposal form and gets the claim check.
This is a new type of cover in India wherein, the insurance company agrees that they will not deduct depreciation amount from claim amount. Therefore they charge extra premium for this policy. The advantage is that the customer gets full amount of claim.
The vehicles must be safely and securely stacked inside the big vehicle which carries it. The packaging and support must be sound to avoid damages during transit. Extra premium and special warranties are designed for this list.
These are special purpose vehicles like formula one where racing takes place. Here the risk of skidding is heavy due to sharp turns and extra speed. Premium is bound to be too high.
Yes. Because these fittings reduce the claim ratio and chances of accidents.
Yes. This is because these associations provide for special services like towing of vehicles, premium discounts, free seminars and a few other advantages to the members. All this helps insurance companies indirectly.
IDV is the choice of the insured. He can choose a value which is in line with the market trends, consider the age of vehicle, the premium aspect and may even consult the insurance company or a reputed surveyor. The process is the same at every renewal of the policy. This is important because it has bearing on premium as well as claim. Many customers are not aware of these aspects.
It is necessary to show the individual values of accessories and extra fittings like fans, radios and similar items inside the car. This is required to help in underwriting as well as claims.
It is a written reminder by insurance companies for the renewal of policy which is getting expired. It is not a statutory requirement but it helps in retenction of business and as a service parameter.
Normally by check, or cash. It is also a practice to pay premium online.
There are 2 cases :
1) Normal Renewal (without Break): RC copy, Old insurance policy copy.
2) Renewal after Policy lapse (with Break): RC copy, Old insurance policy copy, Physical Inspection report with Photographs.
* Break - Policy expiration date has already crossed.
As per policy conditions, the policy can be cancelled by either of the parties by giving 15 days legal notice.
Normally valuation is revised at the time of renewal. The help of a qualified surveyor or automobile engineer is taken. It is duty of the insurance company to make this aspect clear to the insured.
Yes. But it should be done by experienced and senior surveyors and automobile engineers. The insurance company should advice the insured accordingly.
In such cases the insured must bring the vehicle for inspection so that any damaged or stolen parts in the intervening period can be determined before renewal is done.
Normally the dealers give the offer to cover insurance free of premium to the purchaser. They issue the basic documents by getting authorization from the respective insurance companies. For this purpose, some of the dealers may have arrangements for agency, etc.
No. It is not allowed to pay premium through third party checks. It is only allowed that the insured himself pays the premium amount through cash or his own check.
The policy is issued to cover the manufacturer's warranty beyond the period of warranty given initially. It is extended by insurance companies by aggreeing to pay the claim in the extended period. Additional premium is charged for this.
Act only policy is for covering the minimum legal liability. Own damage policy is for covering damages to the vehicle. The comprehensive policy combines own damage and TP liability covers.
These include IDV, embedded devices, no claims, model hazard, membership of Automobile Association, and special purposes of use, anti-theft fittings, and capacity of vehicle and drivers skill.
In coinsurance the risk is shared between multiple insurance companies. The sharing is for premium and claims. The same vehicle under the same policy is insured combinedly by these companies. Re-insurance however means that the first insurance company will insure a part of the risk with the re-insurance company but re insurance is not common in motor insurance.
Co-insurance is common but re insurance is not common.
Yes. Up to capacity of vehicle. Additional premium is charged. The passengers can be either named or unnamed and fair paying or non-fair paying.
This is applied wherever loans are given by banks or financiers. This clause protects the interest of bankers and financiers in case of claim.
These include terrorism, flood, cyclone, earthquakes, etc. by payment of additional premium.
These are mentioned in the policy which includes geographical limits, limitations as to use, illegal purposes beyond policy period. No documents, no claim intimation noncooperation by insured, etc.
Only in the case of two wheeler vehicles recently New India Assurance Company had agreed to issue a policy of three years. In all other cases vehicles are covered only under 1 year policy.
The limit for third party liability in India is unlimited. This is not the case in other countries. Therefore insurance companies in India have to provide large amounts for this purpose.
Yes. They can be covered subject to payment of additional premium but to a limited number.
As per IRDA guidelines, only the vehicles lying in India can be covered for insurance by Indian insurance companies.
The practices differ, but depending on the type of vehicle and policy the usage is mentioned in the terms of the policy clearly. For example, it could be for personal use office use, commercial use, or racing purposes in sports events.
It is a warranty that he must look after the safety of salvage. In practice, if he violates this condition some amount is appropriately deducted from the assessed claim amount.
If there is an accident involving collision from third party vehicles and the driver of that vehicle is negligent then the third party liability arises. This can be of two types: TPPI (for personal injuries) and TPPD (for property damage).
PAYD means – pay as you drive. This is not practiced in India. Abroad discounts are given by fitting the embedded devices to record movements of vehicles, recording road conditions, speed, distance covered, etc.
Whenever a vehicle which has been stolen is recovered by police authorities they have to keep it in their custody and inform the court. This is known as a super dari vehicle. Nobody can use it during this period. If the theft claim has already been settled, then with court orders insurance company may dispose off the vehicle under subrogation clause.
A disposal part is one which is an old part having been used for the same period and can be used in replacement cases for old parts but this practice is not very common.
Warranties are stipulations as a part of the contract. These indicate what conditions the insured should abide by.
These are mechanisms to provide variety in covers by paying additional premium.
These will include fire brigade vans, ambulances, formula one, sports cars, police vehicles like jeeps and vans and military vehicles.
This is in great demand. It is not easily available in India as on date. This is claimed to be insured if the vehicle has some manufacturing defect in important auto parts like in engines.
This clause is applicable in case of disputed claims for amount of payment. Whereas the liability is established under the policy and arbitrator is appointed. To sort out the differences between insurer and insured and efforts are made to arrive at a claim amount which is acceptable to both the parties.
Accidental / Theft case(s)
Whenever the accident involves third party vehicles having negligence of their driver, or there are deaths or injuries or a hit and run case is involved. FIR needs to be lodged with the nearest police station.
It is a special court established for speedy settlement of motor, 3rd party claims.
These cases are lodged with these MACTs in various states. Evidence is produced by the claimant and insurance companies are allowed to their defense. Then the compensation is awarded by MACT courts depending on merit of each of the cases and factors like negligence, age, career details, life expectancy, etc. . . . Structured compensation is being considered.
In case of injuries, serious cases and emergencies the patients are rushed through ambulances to hospitals.
FIR is lodged in the nearest police station for involvement of third party vehicles and hit and run cases. The final investigation report is also received from the same police station.
Practices differ in this regard from insurer to insurer in India. Some companies charge extra premium and give these facilities for a specified number of days for the convenience of the insured when the vehicle is given for repairs.
Claims / Settlements
It is a method of settling cases where both the parties first discuss informally and then come with a compromised proposal before the lok adalat who finally agrees for settlements of compensation as agreed upon. These sessions are held periodically and it saves time and money through simple procedure for one and all.
This is a breach of warranty. So the claim is reduced by a certain percentage and extra premium is charged for multiple years as penalty. This occurs usually in goods carrying vehicles.
The driver is not allowed to drive a vehicle when he is under the influence of liquor. Normally the insurance companies repudiates the own damaged liabilities but various courts have held that third party compensation has to be paid.
Out of court settlements arise when both the parties meet outside the court and decide to negotiate and compensate the damages to be paid. In case they agree they may withdraw the court case.
In this case both the parties approach the court and submit a common proposal for compromise in the case. The court will have to agree to this before the case is finalized.
Basic documents required from Claimant, for the Claim process are:
1) Claim Form
2) RC copy
3) Valid DL
4) Insurance Policy copy
5) FIR (Accidental case(s))
6) Medical Report (Accidental case(s))
7) Interim report (Theft case(s))
8) Fitness certificate(Commercial vehicle)
9) Permit (Commercial vehicle)
All theft cases of vehicles will have to be reported to the police by filing FIR.
In case of a scooter, accessories are payable only if scooter is also stolen at the same time. However, in case of car even the theft of accessories alone is covered.
Self-survey is done by insurance companies’ own employees who are well trained in survey work. At the moment IRDA has put a limit of Rs. 20,000 only up to which motor OD claims can be assessed by in-house surveyor.
Yes. It can be done once at the request of the insured in writing. At such a review, an officer one step senior to the officer who repudiated the claim can review it.
No. The limitation period will apply.
Technically, no. But practically yes. Up to reasonable period with the concurrence of the company if insured gives convincing reasons for delay in intimation.
Overall there are two categories, 1) absolutely in genuine claim which means without accident damage is claimed, 2) where the claim amount is too much inflated.
IDV – or market value whichever is less (minus) salvage.
No. but the principles and purposes of the questions framed in this forms for all the companies are the same.
If it is possible. In some cases the drivers names are given when available.
No. these claims are to be paid because the vehicle was not operating and therefore driver’s license is immaterial in these circumstances.
These documents are required in case of commercial vehicles. For other vehicles a claim can be paid (maybe partially) in such cases.
This is a violation of RTO guidelines. Moreover it results into poor visibility and illegal use. Therefore, such claims cannot be entertained.
Partial losses always cause disputes but comprehensive policy does cover this type of damages but not full replacements of bodies.
Yes, fire is a covered peril under motor policy.
Earlier it was allowed but now IRDA doesn’t want this practice to continue.
Practices differ. However, insurance company can give a letter to the insured stating the extracts of the relevant portion of the survey report. Alternatively the survey report can be shown to the client.
Because of washing of surface of the road in the first showers which brings nails and other sharp objects to the surface, causing bursting and puncture of tires and tubes of vehicles.
Yes towing charges are payable as per policy conditions and the amount is specified by each company in the policy. It is different for different types of vehicles.
These are never paid in claims.
These claims run into difficulties because the insured wants full replacement of the fiber-glass body which is not allowed. Since the partial claims cannot be subjected to strict indemnity of the body, the problem is faced while settling such claims so some of the insurers do not like this risk.
Damage due to accident in poor visibility conditions or fog is payable. As far as claims arising out of the other 3 perils mentioned are concerned the same are payable if the insured has paid an extra premium of these perils in the policy.
Yes this chance is given once only. The claim is reviewed at the request of the insured by the insurance company. The officer who is senior to the repudiating authority will review the claim.
The insurance claim has to be reported within 24 hours by phone, email, letter, personal visit (any of these) to the nearest office/call center/claims dept./ any of these. In addition, there are toll free numbers available also. In any case, the claim intimation cannot be delayed beyond 7 days because claim can be technically rejected for delay.
Proposal form is a legal basis of contract of insurance. It has to be filled up and signed by insured. All questions are to be replied in full and with facts and figures. Any mistake or false information may lead to breach of utmost good faith, resulting into the possibility of repudiation of liability by the insurance company. The proposal form contains important information regarding the insured, the vehicle, the type of cover required, past claims history, physical hazard, etc. it has bearing on acceptance and rating of risk by the company.
Similarly, the claim form is also an important form to be filled up fully and correctly and signed by the insured. It forms the basis of settlement of the claim. It is issued by the insurance company when the claim is intimated by the insured. Along with claim form, certain documents are also to be submitted to the company in support thereof. A detailed description of the accident has to be mentioned.
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