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  • Divya Kumari

Motor Claim related to Insurance

Updated: May 6

Written by: Divya Kumari(B.A.LL.B 4th Year) and Kumari Neha (B.B.A.LL.B 4th Year), ICFAI UNIVERSITY, DEHRADUN


Motor Claim related to Insurance

Introduction

Automobile insurance, also referred to as motor vehicle insurance is a contract in which the insurer assumes the risk of any loss suffered by the owner or operator of a vehicle due to damage to people or property sustained in an accident. There are different kinds of auto insurance, and each one differs not just in the risks it covers but also in the laws that support it. Collision insurance pays for damage to the insured car if it collides with another vehicle or object; comprehensive insurance pays for damage to the insured car resulting from fire, theft, or a variety of other causes; medical-payment insurance pays for damage to the insured car resulting from an accident for which the insured is found legally liable; &medical-payment insurance pays for damage to the insured car resulting from an accident for which the insured is found legally liable.

According to the Insurance Information Institute, roughly two-thirds of the money spent on premiums for private passenger vehicle insurance in the United States in the early twenty-first century went to claims. Car damage accounted for more than half of the total. The other sections deal with personal injuries. The remaining third of premiums paid covered insurance firms' expenditures, such as commissions, policyholder dividends, & business operations, & contributed to their profits.

Other alternatives to vehicle accident insurance have been attempted in various countries. These include no-fault mandatory liability insurance & loss insurance (accident &property insurance) held by the driver or owner on behalf of any prospective victim who would be compensated regardless of fault. Most existing no-fault plans are restricted in that they generally allow the insured party to sue the at-fault party for losses over those covered by the plan, as well as allowing insuring firms to recover expenses from each other based on liability determinations. Total no-fault insurance, on the other hand, would prevent the insured from bringing tort liability lawsuits against the insurer or the insurer from recovering expenses from another insurer.


Is Motor Insurance Mandatory?

Yes, you must obtain motor insurance before driving your car on the roads, according to section 146 of the Motor Vehicles Act, 1988. If you do not wish to purchase a complete insurance policy, third-party coverage is the minimal minimum that you must have for your car to operate.

What does the Policy cover?

You'll generally be covered for the following with an automobile insurance policy:

• Natural disaster damages & losses, such as earthquakes, floods, fire, lightning, landslides, hurricanes, & so on.

• Damages resulting from human activities, such as burglary, theft, rioting, strikes, or any other harmful behaviour.

• Third-party legal responsibilities resulting from damages (including bodily injury & death) & financial losses to third-party property.

What is the Insurance Covered?

Vehicles are typically insured at a predetermined Insured Declared Value (IDV). In other words, IDV represents the current market worth of your vehicle. A new vehicle's IDV is higher, &it depreciates with time.

Factors affecting Motor Insurance Premiums

Understanding some of the primary elements that influence auto insurance rates will help you make an educated decision:

  • Type of cover

In comparison to its third-party counterpart, a comprehensive insurance policy that covers both the insured vehicle & a third party would have higher premiums.

  • Geographical location

One of the most important drivers of motor insurance premiums in India is where you live. If you live in a major city in the country, for example, the likelihood of vandalism & accidents is higher than in smaller Tier 2 & Tier 3 cities. As a result, insurance companies will raise the premiums on your car insurance coverage.

  • Installed safety features

If your vehicle has additional safety features, such as anti-theft devices, airbags, a GPS monitoring system, an alarm, or anti-lock brakes, insurers will take your efforts to secure your vehicle into account & charge you a discounted (read: cheap) rate.

  • Ancillary modifications

If you have pricey accessories placed in your vehicle, such as alloy wheels, roof rails, &the like, you may face higher insurance prices. It is advised that you have these items fitted by the individual auto dealer at the time of purchase if you want coverage for them as well.

  • No Claim Bonus

If you drive responsibly all year & don't submit a claim for damages, you'll be eligible for a Claim Bonus. It's also a good idea to avoid filing a claim for small damages, such as replacing a shattered windshield.

Motor insurance gives you peace of mind since you know you'll be covered financially if your vehicle is damaged in the event of an accident.

Insurance Claims

A formal request to an insurance company for payment based on the provisions of the insurance policy is known as an insurance claim. Once the claim is authorized, the insurance company examines it for legitimacy before paying the insured or requesting party (on behalf of the insured).

The non-life insurance sector is seeing changes in policy administration& claims, which are two of the industry's most important activities. A non-life insurance customer's relationship is defined by the claims process. Insurers are focusing on improving customers' claims experiences to maintain & gain market share as well as enhance client acquisition & retention rates. Differentiation through new & more effective claims management procedures is one of the most essential & successful strategies to maintain market share & profitability in the highly competitive insurance industry.

Insurers may revolutionize claims processing in particular by integrating current claims systems with comprehensive business analytics, document, & content management systems. This will improve the efficiency & effectiveness of claims handling. It can assist insurers both operationally & strategically by allowing them to cut claims costs, improve claims processing efficiency, & increase client retention & acquisition.

The claim process in today's insurance offices is based on:

• Claim document & content management tool

• Mobile & smartphone-based technological solutions are the key

• STP processing to reduce latency

• A modern claim-processing platform that is both seamless & reliable

Normal claim process followed by General Insurers:

  • An insured or claimant must notify the insurer of any loss arising under a contract of insurance as soon as possible or within the time provided by the insurer.

  • When a general insurer receives such a notification, it must respond promptly &provide the insured with clear instructions on how to proceed. If a surveyor is required to examine a loss or claim, he or she must be engaged within 72 hours of receiving the notification.

  • If the insured is unable to provide all of the information requested by the surveyor, or if the surveyor does not get the insured's complete cooperation, the insurer or surveyor, as the case may be, may take action.

  • While assessing the loss, the surveyor must adhere to the Authority's code of conduct, & he must communicate his findings to the insurer within 30 days of his appointment, with a copy of the report provided to the insured if he so wants. When the surveyor requests an exten[1]sion from the insurance for the submission of his report due to specific circumstances of the case, either due to its unique & problematic nature, the surveyor shall notify the insured.

  • A surveyor may not take more than six months from the date of his employment to complete his work. An insurer must offer the insured a settlement of the claim within 30 days after receiving the survey report or supplementary survey report, as the case may be. If the insurer decides to reject a claim under the policy for any reason that must be documented in writing& communicated to the insured, it must do so within 30 days of receiving the survey report or additional survey report, as the case may be.

  • A surveyor's task must be completed within six months of the start of his employment. Within 30 days of receiving the survey report or supplementary survey report, the insurer must offer the insured a settlement of the claim. If the insurer rejects a claim under the policy for any reason, it must do so within 30 days of receiving the survey report or supplementary survey report, whichever comes first.

How to Make a Claim under Motor Insurance?

A claim under a motor insurance policy might be:

  • · For personal injury or property damage caused by someone else under the terms of a car insurance policy. In this case, this person is referred to as a third party.

  • · For damage to one's insured car. This is referred to as an own damage claim, & it is available to insureds who have a package or comprehensive insurance.

Third-Party Claim

If your car is involved in a third-party claim, the accident must be reported to the police & the insurance provider as soon as possible. If you are a victim, that is, if your car was involved in an accident with someone else's vehicle, you must collect the insurance information for that vehicle & notify the insurer.

Own Damage Claim

In the event of an own-damage claim, in which your car is damaged as a result of an accident, you must promptly notify your insurance provider & the police, if necessary, so that a surveyor can assess the loss. Without the authorization of the police & the insurance company, do not attempt to take the vehicle from the accident site. You can remove the vehicle & fix it once you have received authorization. If your insurance coverage includes cashless servicing, which means you won't have to pay for insured losses out of pocket, the insurance company will pay for the workshop directly. If you find yourself in either of these scenarios, you must notify your insurance carrier right away.

Theft Claim

If your vehicle is taken, you must immediately notify the police & your insurance company. You must also keep the transportation department updated. Rather than waiting for a claim to occur, read about the claim procedures & documentation requirements as soon as you receive the policy document. If you need to file a claim, make sure you gather all necessary documents & present them to the insurance company, along with a completed claim form. For certain[2] sorts of claims, there may be additional paperwork requirements. For example, there is a unique requirement that you submit the vehicle keys to the insurance provider in the event of a theft claim.

Conclusion

Insurance is a significant investment, & you will almost certainly acquire numerous policies throughout your life. To make the best decision about what to buy, you must first understand what each type of insurance covers &how it operates. A car insurance policy protects the insured vehicle against financial losses stemming from an accident or other damages. Motor insurance is a type of insurance that protects the policyholder in the event of financial losses caused by an accident or other damage to the insured vehicle. A comprehensive car insurance coverage pays for damages to third parties & their property, as well as compensating for personal losses. Don't only go with the cheapest option; consider what it offers as well.

Take the time to look around for the best coverage for your needs. People frequently claim that they cannot afford insurance, but in truth, they cannot afford not to have it. When unexpected problems emerge, it can save them hundreds of dollars in unplanned expenses. You don't want to waste money on insurance policies that aren't suited for you, but the right coverage can protect you &your family from unexpected disasters.

[1] https://www.bankbazzar.com/insurance/motorinsurance [2] https://www.gicouncil.in/insurance-education/insuranceclaims

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