CLAIMS PROCEDURE

THE PROMPT AND FAIR SETTLEMENT OF CLAIMS IS THE HALLMARK OF

SUCCESS OF AN INSURANCE CO. GOOD SERVICE TO THE INSURING PUBLIC

CLAIMS

PROPER CLAIM SETTLEMENT REQUIRES:

SOUND KNOWLEDGE OF LAW, PRINCIPLES AND PRACTICES OF INSURANCE KNOWLEDGE OF TERMS & CONDITIONS OF POLICIES HASSLEFREE PROCESS WITH TACT, PATIENCE AND NEGOTIATIONS

LEGAL ASPECTS OF CLAIMS

COVERAGE & COMPLIANCE UNDER THE POLICY SHOULD BE THERE:
1. CAUSE OF LOSS SHOULD BE INSURED PERIL PROXIMATE CAUSE OF LOSS- MOST ACTIVE AND EFFICIENT ONUS OF PROOF IS ON THE INSURED- TO PROVE THAT THE LOSS IS WITHIN THE SCOPE OF POLICY (periled Pol) FOR EXCEPTED (EXCLUDED) PERIL, THE ONUS OF PROOF IS ON INSURER ( also in All risks Pol) 2. COMPLIANCE OF POLICY CONDITION BY INSUREDLIKE IMMEDIATE NOTICE (INTIMATION) OF LOSS; SUBMISSION OF PROOF OF CAUSE AND EXTENT OF LOSS, ETC.

LEGAL ASPECTS OF CLAIMS

3. COMPLIANCE OF WARRANTIES OF POLICY 4. OBSERVATION OF UTMOST GOOD FAITH BY PROPOSER AND INSURER BEFORE CONCLUSION OF INSURANCE CONTRACT, MATERIAL INFORMATION LIKE: FIRE INS.- CONSTRUCTION, OCCUPATION OF BLDG. P.A. INS.- AGE, HEIGHT, WEIGHT, OCCUPATION DURING THE POLICY PERIOD, LIKE ANY ADDITIONS & ALTERATIONS IN RISK ( S/M) MAINTAIN THE VEHICLE IN EFFICIENT CONDITION

LEGAL ASPECTS OF CLAIMS.

LOSS MINIMISATION: ON OCCURANCE OF A LOSS OR CLAIM, LIKE: TO ACT AS IF UNINSURED AND TAKE MEASURES TO PROTECT THE PROPERTY INSURED AND MINIMISE LOSS FIRE INSURANCE- TO USE FIRE FIGHTING, FIRE BRIGADE, REMOVE PROPERTY TO SAFER PLACE MOTOR INSURANCE- TO SAFGAUD THE VEHICLE AND DONT LEAVE THE VEHICLE UNATTENDED IN THE EVENT OF ACCIDENT SUE & LABOUR CLAUSE IN MARINE INSURANCE WHICH PUT A DUTY ON THE INSURED TO PREVENT OR MINIMISE THE LOSS AND EXPENSES INCURRED FOR THE SAME ARE PAID, REPAIRS, RECONDITIONING, REDISPATCH, ETC.

LEGAL ASPECTS OF CLAIMS..

5. INDEMNITY OR AMOUNT PAYABLE SHALL DEPEND UPON: - EXTENT OF INSURABLE INTEREST IN PROPERTY AFFECTED - VALUE OF SALVAGE - SUM INSURED AND APPLICATION OF PRO-RATA AVERAGE - CONTRIBUTION IF MORE THAN ONE POLICY - SUBROGATION- TRANSFER OF RIGHTS OF INSURED AGAINST ERRING PARTY

LEGAL ASPECTS OF CLAIMS..

STANDARD CLAIMS: LOSS FALLING WITHIN THE SCOPE OF POLICY TERMS & CONDITIONS NON STANDARD CLAIMS: BREACH OF CONDITION OR WARRANTY OF POICY EX-GRATIA PAYMENT: LOSSES OUTSIDE THE SCOPE OF POICY AND NOT PAYABLE- HARDSHIP CASES. A CERTAIN PERCENTAGE OF CLAIM IS PAID WITHIOUT PRECEDENT. -LIKE INSURED FORGOT TO MENTION AN ITEM TO BE COVERED, BUT HAD INTENTIONS TO COVER IT

CLAIMS PROCEDURE

A. PRELIMINARY PROCEDURE:
NOTICE OF LOSS- INSURED TO ACT: IMMEDIATE INTIMATION OF LOSS TO ENABLE: EARLY INVESTIGATION ABOUT THE CAUSE OF LOSS SO AS INSURER/SURVEYOR COULD SUGGEST MEASURES TO MINIMISE THE LOSSES SAVE AND PROTECT THE PROPERTY/SALVAGE TO HAVE AN IDEA ABOUT THE QUANTUM OF LOSS

NOTICE TO POLICE- IN BURGLARY INSURANCE, T.P. FIRE INSURANCECALL FIRE BRIGADE; TRANSIT INSURANCE- NOTICE TOTRANSPORTER OR CARRIER

CLAIMS PROCEDURE

INSURER TO ACT: ON RECEIPT OF INFORMATIONTO CHECK THAT THE POLICY WAS IN FORCE ON THE DAY OF OCCURRENCE OF THE LOSS/DAMAGE TO CHECK THAT CAUSE OF LOSS WAS INSURED PERIL TO CHECK THAT THE SUBJECT MATTER AFFECTED WAS COVERED UNDER THE POLICY TO CHECK THAT THE NOTICE/INTIMATION OF LOSS WAS RECEIVED WITHOUT UNDUE DELAY TO REGISTER THE CLAIM AND ALLOT A NUMBER FOR FUTURE REFERENCES. A CLAIM FILE IS OPENED TO ISSUE THE CLAIM FORM

CLAIM FORM - CLAIMS PROCEDURE

CLAIM FORM VARY IN ORDER OF INFORMATION REQUIRED AS PER THE CLASS OF INSURANCE CLAIM FORM IS DESIGNED TO GET RELEVANT INFORMATION/CIRCUMSTANCES OF THE EVENTDATE OF LOSS, TIME, CAUSE OF LOSS AND EXTENT, ETC. ROUGH SKETCH OF THE PLACE OF EVENT IF THE MATTER REPORTED TO THE POLICE/FIRE BRIGADE WHETHER ACTION TAKEN AGAINST THE ERRING PARTY/TRANSPORTER DETAILS OF OTHER POLICY FOR THE SAME S/M OTHER QUESTIONS DEPEND UPON THE CLASS OF INSURANCE OR POLICY ISSUANCE OF CLAIM FORM IS NOT ADMISSION OF LIABILITY

CLAIMS PROCEDURE..

B. INVESTIGATION & ASSESSMENT:

RECEIPT OF CLAIM FORM DULLY FILLED IN SMALL LOSS/DAMAGE- NECESSARY INVESTIGATION IS CONDUCTED BY INSURERS OFFICER AND ARRIVE AT THE AMOUNT PAYABLE (UPTO Rs. 20,000) OTHER CLAIMS- AN INDEPENDENT LICENSED SURVEYOR IS DEPUTED TO FIND: -THE PROXIMATE CAUSE OF LOSS -THE EXTENT OF LOSS/DAMAGE(ASSESSMENT) -THE INSURERS LIBILITY TO PAY AFTER AVERAGE, SALVAGE -COMPLIANCE OF POLICY CONDITIONS AND WARRANTIES

CLAIMS PROCEDURE

WHY AN INDEPENDENT SURVEYOR:

BOTH INSURED AND INSURER ARE INTERESTED PARTIES. AN INDEPENDENT PROFESSIONAL SHOULD BE ACCEPTABLE TO BOTH AND TO COURT OF LAW.

P.A. & MEDICLAIM, W.C. LAIMS:

PRESCRIPTION OF THE ATTENDING DOCTOR TO SPECIFYTHE CAUSE OF ACCIDENT, NATURE OF ILLNESS, DURATION OF DISBLEMENT FIR & POSTMORTEM REPORT IN FATAL ACDT. CASES INSURERS HAVE RIGHT TO ARRANGE AN INDEPENDENT MEDICAL EXAMINATION

CLAIMS PROCEDURE..

LIVE STOCK OR CATTLE INS.VET. DOCTORS REPORT

T. P. CLAIMSFIR, MEDICAL CERTIFICATES, FATAL CASE- POSTMORTEM REPORT, AGE, INCOME PROOF LEGAL OPINION TO ASCERTAIN INSURERS LIABILITY AWARD PASSED BY COURT

INVESTIGATION IS REQUIRED TO ENSURE LEGALITY OF THE CLAIMINSURABLE INTEREST, SUPPRESSION OR MISREPRESENTATION OF MATERIAL FACTS, VIOLATION OF POLICY CONDITIONS, MALAFIDE INTENTION OR DELIBERATELY CREATING THE LOSS

CLAIMS PROCEDURE..

C. SURVEYORS AND LOSS ASSESSORS

SURVEYORS ARE PAID FEES FOR PROFESSIONAL WORK SURVEYORS ARE SPECIALISTS IN DIFFERENT CLASS OF BUSINES

MOTOR - ENGINEER IN AUTOMOBILE PROJECTS, MBD, FACTORY - CIVIL OR MECHANICAL ENGINEER FIDELITY GUARANTEE, BURGLARY- CHARTERED ACCOUNTANT MARINE CLAIMS: -TOTAL LOSS OR PART LOSS- SURVEYORS OR LOSS ADJUSTERS -GENERAL LOSSES- AVERAGE LOSS ADJUSTERS EXPORT CLAIMS SETTLED OUTSIDE THE COUNTRY: -COMPANYS OWN OFFICERS -CLAIM SETTLING AGENTS

SURVEYOR AND LOSS ASSESSOR

HOLDER OF LICENCE FROM IRDA THERE ARE CODE OF CONDUCT, RESPONSIBILITIES AND DUTIES OF SURVEYORS THEY HAVE TO UNDERGO TRAINING AND EXAMINATION TO QUALIFY FOR LICENCE REQUISITE QUALIFICATIONS: DEGREE IN ENGINEERING CHARTERED ACCOUNTANT OR COST ACCOUNTANT DEGREE OR DIPLOMA IN INSURANCE FROM AUTHORISED INSTITUTION ACTUARY OTHER EQUIVALENT OR TECHNICAL QUALIFICATIONS AS MAY BE PRESCRIBED IS NOT DISQUALIFIED UNDER IRDA RULES FOR AGENCY LICENCE A SURVEYOR CAN CONDUCT SURVEY IN ANY 3 CLASSES OF BUSINESS OUT OF FIRE, MARINE, MOTOR, HULL, ENGINEERING,MISC. AND LOP TPA- THIR PARTY ADMINISTRATOR CAN HANDLE CERTAIN CLASS OF INSURANCE LOSSES LIKE TP LIABILITY, MEDICLAIM CASH LESS SERVICE

D. CLAIM DOCUMENTS- CLAIMS

PROCEDURE..
INTIMATION LETTER: -TO INFORM INSURER ABOUT THE OCCURRENCE OF LOSS/DAMAGE UNDER A INS. POLICY CLAIM FORM-TO ELICIT INFORMATION ON DATE & TIME OF LOSS, CAUSE OF LOSS, EXTENT OF LOSS, ANY OTHER POLICY, ETC -CLAIM FORM IS ISSUED WITHOUT PREJUDICE- ISSURANCE OF CLAIM FORM DOES NOT MEAN ACCEPTANCE OF LIABILITY DOCUMENTS TO PROVE THE EXTENT OF LOSS INDEPENDENT SURVEY REPORT

CLAIM DOCUMENTS- CLAIMS PROCEDURE..

OTHER DOCUMENTS AS PER CLASS OF BUSINESS:

FIRE- FIRE BRIGADE REPORT, STATEMENTS OF ACCOUNTS STORM, FLOOD, CYCLONE- REPORT OF METEREOLOGICAL OFFICE BURGLARY OR THEFT- FIR OF POLICE AND FINAL REPORT, STATEMENT OF ACCOUNTS, LETTER OF SUBROGATION T.P. CLAIMS- FIR, INVESTIGATION REPORT, INCOME CERTIFICATE, VEHICLE DOCUMENTS, DRIVING LICENSE MOTOR CLAIMS- FIR, VEHICLE DOCUMENTS, DRIVING LICENSE MARINE CARGO- INVOICE, PACKING LIST, GR/RR/B.L./AWB, BILL OF ENTRY, NON DELIVERY,SHORT OR DAMAGE CERTIFICATE, MONETARY CLAIM ON CARRIERS, LETTER OF SUBROGATION AND POWER OF ATTORNEY

E. ARBITRATION- CLAIMS PROCEDURE..

ARBITRATION AS PER ARBITRATION AND CONCILIATION ACT, 1996: TO SETTLE DISPUTE IN REGARD TO QUANTUM OF LOSS BETWEEN INSURED AND INSURER, LIABILITY IS ADMITTED SETTLEMENT IN COURT SHALL TAKE LONG TIME AND EXPENSIVE ARBITRATION IS LESS COSTLY AND INFORMAL A SINGLE ARBITRATOR IS MUTUALLY AGREED BY INSURED AND INSURER IN CASE OF DISAGREEMENT ON SINGLE ARBITRATOR, EACH APPOINT ONE ARBITRATOR AN UMPIRE SHALL HEAD THE PROCEEDINGS IF TWO ARBITRATORS ARBITRATORS DECISION IN FINAL AND BINDING FIRE & MISC. POLICIES HAVE CLAUSE TO HAVE ARBITRATION IN CASE OF DISPUTE ON QUANTUM

F. LIMITATION- CLAIMS PROCEDURE..

LIMITATION PERIOD OF 12 MONTHS:

INSURER SHALL NOT BE LIABLE FOR A LOSS/DAMAGE AFTER EXPIRATION OF 12 MONTHS FROM THE DATE OF OCCURRENCE OF LOSS/DAMAGE UNLESS CLAIM IS PENDING ACTION OR SUBJECT TO ARBITRATION AFTER EXPIRATION OF 12 MONTHS FROM THE DATE OF DISCLAIMER NOTIFIED UNLESS A SUIT IS FILED AND PENDING IN COURT OF LAW WHY LIMITATION PERIOD- THE ACCOUNTS OF INSURANCE CO. CAN NOT BE KEPT OPEN FOR INDEFINITE PERIOD

G. CLAIM SETTLEMENT

CLAIM SETTLEMENT IS BASED ON :

CLAIM FORM INDEPENDENT SURVEY REPORT; LEGAL OPINION; MEDICAL OPINION, ETC. DEPENDING UPON THE CASE VARIOUS SUPPORTIVE DOCUMENTS REQUIRED TO ESTABLISH THE LOSS/DAMAGE AND SUBMITTED BY INSURED ANY OTHER EVIDENCE SECURED BY THE INSURER

PAYMENT OF CLAIM -IF FOUND IN ORDER ACKNOWLEDGEMENT/RECEIPT OF THE SAME IF POLICY IS SUBJECT TO AGREED BANK CLAUSECLAIM TO BE PAID TO BANK AND RECIPT BY BANK

G. CLAIM SETTLEMENT.

IF NOT FOUND IN ORDER- REJECTION LETTER BY REGD. POST WITH REASONS MARINE CLAIMS- INSURABLE INTEREST AT THE TIME OF LOSS

POLICYHOLDER AT THE TIME OF LOSS POLICY ENDORSED/ASSIGNED

POST SETTLEMENT- FIRE:REINSTATEMENT OF SUM INSURED; F.G.: CANCELATION OF POLICY; TOTAL LOSS: CANCELLATION OF POLICY

H. LOSS MINIMISATION

AT COMMON LAW AND UTMOST GOOD FAITHINSURED HAS TO ACT AS IF HE IS UNINSURED ON LOSS/DAMAGE- IT IS LEGAL DUTY OF INSURED TO TAKE MEASURES TOPROTECT THE PROPERTY AND MINIMISE THE LOSS CONDITION IN THIS REGARD IS INCORPORATED IN THE POLICY- E.G., MOTOR- SAFTEY, FITNESS, NOT TO BE LEFT UNATTENDED, PREVENT FURTHER LOSSES SURVEYOR TO CONFIRM THE COMPLIANCE OF POLICY CONDITIONS SURVEYOR TO SUGGEST STEPS FOR LOSS MINIMISATION, REMOVAL OF UNDAMAGED PROPERTY TO SAFE PLACE AND PROTECTIO OF SALVAGE; EXPLOIT BEST PRICE FOR SALVAGE

LOSS MINIMISATION.

SALVAGE: ON PAYMENT OF CLAIM, SALVAGE BELONGS TO INSURER.

INSURER CAN ALLOW RETAINING OF SALVAGE BY INSURED BY DEDUCTING THE CLAIM BY A REASONABLE AMOUNT SUGGESTED BY SURVEYOR OR RECOVER IT AND DISPOSE OF SALVAGE AT BEST PRICE AS PER CO. RULES

MARINE CLAIMS

SUE & LABOUR CHARGES ARE PAID FOR REPAIRS, RECONDITIONING AND FORWARDING OF CARGO DAMAGED/AFFECTED BY INSURED PERIL SURVEYORS ENGAGED FOR SUPERVISION OF DISCHARGE OF BULK CARGO, SPECIAL VULNERABLE/PRECIOUS CARGO WHICH HELPS MINIMISATION OF LOSSE

LOSS MINIMISATION.

RECOVERIES:

AFTER MAKING CLAIM PAYMENT, INSURER ARE ENTITLED TO SUBROGATE THE RIGHTS OF INSURED TO RECOVER THE LOSS FROM THE ERRING PARTY WHO CAUSED THE LOSS/DAMAGE INSURERS RECOVER LOSS FROM SHIPPING COMPANIES, RAILWAYS, PORT TRUST, TRANSPORTERS SUBROGATION LETTER IS DULLY STAMPED AND SIGNED BY INSURED.

Gujarat Cyclone costs insurance cos Rs 1,200 cr

NEW DELHI, 1998, July 14: The devastation in coastal Gujarat caused by the cyclone will cost the insurance companies over Rs 1200 crore. The General Insurance Corporation and its four subsidiaries have arrived at this figures based on claims served on them. Of the total 2,492 claims placed on the insurance firms, roughly 46 per cent are for fire policy. This policy includes damage done by floods, storms, tempest, and earthquake. Since most of the devastation was inflicted by strong winds and rain, this policy is responsible for almost half the claims. About 21 per cent of the claims relate to motor insurance, reflecting the number of vehicles which were destroyed by the cyclone. Another 12 per cent relate to damage done to ships under the marine hull policy. The rest involve engineering and miscellaneous losses.

Gujarat Cyclone costs insurance cos. Rs 1,200 cr

The Gujarat Chief Minister Patel said that the total damage of public property, private assets, and loss of business are estimated at Rs 2169.91 crore. Though the total claim amounts to Rs 1,200 crore, there will be a net outflow of only Rs 200 crore. The rest of the money will be compensated to them by way of re-insurance, say officials. United India Insurance faces the maximum amount of claim among the four subsidiaries of GIC. Its claims total to Rs 593.88 crore. Oriental Insurance faces a pay out of Rs 408.97 crore; New India Assurance Rs 147.01 crore; and National Insurance about Rs 69 crore.

SJVNL CALIM FOR RS. 307 CRORES PAIDIAR POLICY

Shimla: 21, MAY 2008 Settling what probably one of the largest insurance claims in the countrys power sector, CMD National Insurance Company handed over a Rs 307 crore cheque to Satluj Jal Vidyut Nigam (SJVNL) for the losses the public sector utility incurred due to material damages and flooding of the power house at the 1500 MW generation station in Jhakri in September 2005. The 6 X 250 MW Nathpa Jhakri hydropower station of SJVNL was insured for the year 2005-06 under Industrial All Risk Policy with National Insurance Co, as leader. Other co co-insurers were New India Assurance Company, United India Insurance Company, Oriental Insurance Company, Reliance General India Insurance Company, Bajaj Allianz General Insurance Co, ICICI Lombard General insurance Co. and Chollamanadalam General insurance Co.

SJVNL CALIM FOR RS. 307 CRORES PAIDIAR POLICY..

On the night of September 4 &5, 2005 the power house of Nathpa Jhakri Hydro Power Station was flooded resulting in stoppage of complete plant generation. One generating unit was temporarily reinstated and the generation restarted 44 days later. To ease cash flows and for early restoration of the plant the insurance company released Rs 51 crore March 2006. Finally the claim was settled at Rs 71.19 crore against material damages and Rs 236.68 crore against business interruption losses, a SJVNL communiqu stated.

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