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Non Life Insurance - How late is too late in filing a vehicle insurance claim?

30 Nov 2012

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In case of theft, inform the insurer immediately after lodging an FIR Rising number of accidents and incidents of motor theft make it imperative for a car insurance policyholder to be fully aware of the important terms of their policy, one of them being the time limit available for filing a claim. While most motor insurance policy wordings say that the claim should be registered immediately for quick processing, the word immediately is not defined.

Immediately, in English means right after or straightaway, while it might be difficult for policyholder to register a claim soon after an accident, it also puts extra burden on him. Defining the time periods clearly on the policy wordings would certainly help policyholders in timely registration of claims without hassle, and also provide a guideline for people who delay claim registration unnecessarily. While an insurance company reserves the right to reject a claim if the claim intimation is delayed, informing policyholders how late is actually too late would definitely be a step in right direction.

In the past, there have been instances of insurers rejecting claims due to delay in intimation or document submission. However, last year in September, the insurance regulator Irda (Insurance Regulatory and Development Authority) issued guidelines to instruct insurers not to reject claims simply on the basis of delay in intimation or document submission.

Even the consumer courts are not always disposed towards insurance companies when they reject claims due to just a delay in intimation. In October 2012, a district consumer disputes redressal forum of Delhi ordered a public sector insurer to honor a claim for a stolen motorbike.

In this case, the insurer had earlier rejected the claim due to delay in intimation, however, the forum observed that the bike owner had called the police control room immediately, lodged an FIR and also informed the insurance company orally soon thereafter. But the written claim was made three months later and so the claim was rejected.

The consumer court’s ruling stated, “Any delay on the part of the complainant in intimating the insurance company... is of no consequences when the investigating agency was put into action immediately after the theft occurred.... Since the factum of the insurance cover has not been denied – the fact of theft is established from the judicial papers – the insurance company cannot escape from his liability by taking the plea that the information was given belatedly.”

“Insurance companies accept cases where the claims seem genuine even if there is significant delay in intimation. Informing insurers about accident or damage may not be on the top of a policyholder’s mind and insurers have to understand that,” said K N Murali, senior VP and head of motor vertical, Bharti Axa General Insurance.

In case of accidents, however, the delays should be due to valid reasons and should not be taken casually as the claim might be rejected if later it is found that the extent of damage to the vehicle has increased over a period of time. In case of thefts, the insurance company should at least be informed on the phone right after you inform the police. The written intimation can follow later.

Source: mydigitalfc.com BACK

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