Can policyholders appoint their own surveyor?

While you are allowed to appoint your surveyor, the insurance company may still reject his report

After a fire broke out in Rajiv Gupta’s chemicals factory at Taloja, near Mumbai, the insurance company-appointed surveyor submitted that Gupta should get 60 per cent of the claim. Obviously, Gupta did not agree with the report. Gupta wanted to appoint a surveyor on his own to get the loss reassessed, but the insurer did not allow it.

Gupta’s is not an isolated case. Most policyholders do not agree with an insurer-appointed surveyor’s report. That is because the surveyor is seen to favour the insurer. Consumer activist Jehangir Gai says the insurer is free to appoint any surveyor and the consumer does not have a say. “Many surveyors harass the policyholder by delaying their report or threatening to reject their claim unless the insured greases their palms,” he adds. When a policyholder files a claim, a surveyor is appointed to assess the loss. The insurance company settles the claim on the basis of the report submitted by the surveyor.

But, you can appoint your own surveyor. “The insurance law doesn’t prohibit the insured from appointing his own surveyor. But, locating one can be difficult for a policyholder. Then, many policyholders want the insurer to bear the cost of the surveyor,” says J Hari Narayan, chairman of Insurance Regulatory and Development Authority (Irda).

Typically, surveyors are appointed by general insurance companies to assess fire, motor or personal accident. They are independent authorities and work on behalf of either the insurer or the policyholder. Therefore, whoever appoints the surveyor bears the fee. But before that, there are very bleak chances that the insurer will accept the report prepared by the surveyor appointed by the policyholder. Even when independent surveyors are appointed, insurers have the option of re-appointing surveyors till they get the report that suits them.

If getting your own surveyor is not enough of a problem, there could be other reservations. Amarnath Ananthanarayanan, managing director and chief executive officer of Bharti AXA General Insurance, says, “Customers can appoint their surveyors only if it’s agreed upon at the time of policy issuance and documented in the proposal. This is applicable only for fire and marine policies.”

Claims below Rs 20,000 are settled by in-house surveyors who are company employees. Claims worth more than that need to be assessed by company-appointed surveyors. But given that these surveyors are appointed by the insurance company, their independence is doubtful. Sanjay Datta, head of claims and underwriting at ICICI Lombard, says, “We may accept the insured’s surveyor depending on the situation and location of the accident in case of a motor accident survey.”

The other problem is that surveyors working on fire claims need high level of expertise, whereas the ones working on motor insurance need to be aware of the latest automotive technologies. “The industry lacks good quality surveyors. Our work on the Insurance Surveyor’s Association will help in finding good talent, attracting more recognition for the profession, making surveyor data available for public and gradually bringing more transparency here,” says Hari Narayan of Irda. The insurance industry is also recommending that the surveyor be penalised in case of delay in submitting report.