Car owners may see faster claim settlement

With Irdai proposing to increase the limit for appointing external surveyors to Rs 50,000, things should get simpler for smaller claims

Car owners might see faster claim settlement, with the insurance regulator proposing an increase in the limit for hiring external insurance surveyors.

The Insurance Regulatory and Development Authority of India (Irdai) has proposed the limit for appointing external surveyors be increased to Rs 50,000 for motor claims and Rs 1 lakh for other claims.

To settle claims up to these amounts, general insurance companies need not have to appoint an external surveyor. It can be done by an in-house surveyor. The earlier limit was Rs 20,000 for all claims. The new rule has both advantages and disadvantages, say experts.

The biggest advantage is that claims can be settled faster. According to Chandan Grover, vice-president, risk management and claims, Prudent Insurance Brokers, with many customers buying high-end cars, there has been an increase in the average amount of claims. But, due to the lower limit, insurance companies had to wait for external surveyors’ assessment before settling.

“Surveyors are few in number and overburdened. Hence, getting an external surveyor’s report for settling the claim used to cause delays. Now, insurance companies will be able to settle more claims using an in-house surveyor,” he says.

Divya Gandhi, head, general insurance & principal officer at Emkay Insurance Brokers, also agrees the increase in the limit will ensure faster settlement of small claims and reduce cost for insurance companies.

“The number of claims, especially in private vehicles, have gone up as more people buy high-end cars. But insurance companies do not have enough surveyors,” she says.

One reason for the shortage of surveyors is the low remuneration, says a senior official with a private general insurance company. However, as more claims get settled in-house, companies will need to ensure the in-house surveyors are qualified for the survey. “Companies will have to ensure   the surveyors they appoint are competent to negotiate with the workshop for repair costs. Otherwise, the owner might end up getting over-charged,” Grover says.

There is also a possibility that the in-house surveyor, being a company employee, might be biased towards the company. He might try to save the company money by reducing the claim amount, Gandhi points out.

In such cases, vehicle owners can approach the grievance redressal cell of the insurance company to review the claim. If that does not work, the next step is to approach the insurance ombudsman and then Irdai. If the dispute is still not addressed, he can can take the legal route by approaching a court of law.

A customer can also appoint a surveyor on his own expense and the second surveyor’s report too is acceptable in the court of law, Grover adds.

However, according to the insurance official, in case of private vehicles disputes are few. “With zero depreciation covers becoming popular, we don’t see much much disputes in private car claims,” he says.