All about Motor Insurance and Consumer rights

Why Motor Insurance?

Motor insurance gives protection to the vehicle owner against (i). damages to his/her vehicle and (ii). pays for any Third party Liability determined as per law against the owner of the vehicle. Third party Insurance is a statutory requirement. The owner of the vehicle is legally liable for any injury or damage to third party life or property caused by or arising out of the use of the vehicle in a public place. Driving a motor vehicle without insurance in a public place is a punishable offence in terms of the Motor Vehicles Act, 1988.

Types of Motor Insurance:

Broadly there are two types of insurances policies that offer motor insurance cover:

1- Liability Only Policy (Statutory requirement)
2- Package Policy (Liability Only Policy + Damage to owner’s Vehicle usually called O.D Cover

Remember that if you take only a Liability Only Policy, damage to your vehicle will not be covered. Hence, it would be prudent to take a Package Policy which would give a wider cover, including cover for your vehicle.

What Motor Insurance covers:

The damages to the vehicle due to the following perils are usually covered under OD section of the Motor Insurance policy:

- Fire, Explosion, Self- Ignition, Lightning
- Burglary/Housebreaking / Theft
- Riot & Strike
- Earthquake
- Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost
- Accidental external means
- Malicious Act
- Terrorism acts
- While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air
- Land slide / Rock slide

What Motor Insurance excludes:

The following contingencies are usually excluded under the Motor Insurance Policy:

- Not having a valid Driving License
- Under Influence of intoxicating liquor/ drugs
- Accident taking place beyond Geographical limits
- While Vehicle is used for unlawful purposes
- Electrical/Mechanical Breakdowns.

 

How to make a Claim?

Formalities for a motor insurance claim

A claim under a motor insurance policy could be

- For personal injury or property damage related to someone else. This person is called a third party in this context) or
- For damage to your own, insured, vehicle. This is called an own damage claim and you are eligible for this if you are holding what is known as a package or a comprehensive policy.

Third party Claim

In a third party claim, where your vehicle is involved, it is important to ensure that the accident is reported immediately to the police as well as to the insurance company.

On the other hand, if you are a victim, that is, if somebody else’s vehicle was involved, you must obtain the insurance details of that vehicle and make an intimation to the insurer of that vehicle.

Own Damage Claim

In the event of an own damage claim, that is, where your own vehicle is damaged due to an accident, you must immediately inform insurance company and police, wherever required, to enable them to depute a surveyor to assess the loss.

Do not attempt to move the vehicle from the accident spot without the permission of police and the insurance company.
Once you receive permission for removal of the vehicle and for repairs, you can do so.

If your policy provides for cashless service, which means you do not have to pay out of your pocket for covered damages, the insurance company will pay the workshop directly.

In either of these situations, you must intimate the insurance company immediately.

Theft Claim

If your vehicle is stolen, you must inform the police and the insurance company immediately. In addition you must keep the transport department also informed.

As soon as you receive the policy document, read about the procedures and documentation requirements for claims rather than wait for a claim to arise.

If you have to make a claim, ensure that you collect all the required documents and submit them along with the requisite claim form duly filled in, to the insurance company.

There may be certain specific documentation requirements for specific types of claims. For instance in respect of a theft claim, there is a special requirement that you should surrender the vehicle keys to the insurance company.

 

Consumer Grievance

• If your insurance company does not resolve your complaint to your satisfaction you can escalate your complaint to IRDA.
• If your complaint is suitable for taking to the Insurance Ombudsman IRDA will help you resolve it by taking it up with the insurance company.
• For disputes where enquiry or adjudication are required you should approach the Consumer Forum or Courts.

The process/procedure of recording the Grievance



Step 1 - Report to GRO of Insurance Company

- Approach the Grievance Redressal Officer of the insurance company where you got your policy.
- Give your complaint in writing along with the necessary support documents.
- Take a written acknowledgement of your complaint with the date.
- Download the latest contact list of GRO’s of Insurance Companies here, GRO's of Insurance Companies

Step 2 - Report to IRDA

You enter into step 2 if the issue is not resolved to your satisfaction by the Insurance Company.

Now, you have 3 options.

1. Approach the Grievance Redressal Cell of the Consumer Affairs Department of IRDA:

- Call Toll Free Number 155255 or Send an e-mail to complaints@irda.gov.in

2. Send a letter or fax to IRDA with your complaint:

- Download the complaint form from Complaint Form

- Fill and send by post or courier to:

Consumer Affairs Department
Insurance Regulatory and Development Authority
3-5-817/818, United India Towers, 9th Floor
Hyderguda, Basheerbagh
Hyderabad – 500 029

Or Fax to 040-66789768

3. Make use of the Integrated Grievance Management System:

- Register and monitor your complaint at IGMS Portal

If you use the IGMS, you can track and monitor your complaint online.

Step 3 - Insurance Ombudsman

You may also directly come to this step after step 1 if the below listed criteria is met. You may also enter into Step 3 as per the recommendation from IRDA as well.

Insurance Ombudsman - The Insurance Ombudsman scheme was created by Government of India for individual policyholders to have their complaints settled out of the courts system in a cost-effective, efficient and impartial way.

There are 12 Insurance Ombudsman in different locations and you can approach the one having jurisdiction over the location of the insurance company office that you have a complaint against.

You can approach the Ombudsman with complaint if:
- You have first approached your insurance company with the complaint and
- They have not resolved it
- Not resolved it to your satisfaction or
- Not responded to it at all for 30 days
- Your complaint pertains to any policy you have taken in your capacity as an individual and
- The value of the claim including expenses claimed is not above Rs 20 lakh

Your complaint to the Ombudsman can be about:
- Any partial or total repudiation of claims by an insurer
- Any dispute about premium paid or payable in terms of the policy
- Any dispute on the legal construction of the policies as far as it relates to claims
- Delay in settlement of claims
- Non-issue of any insurance document to you after you pay your premium

Link to the complete list of Insurance Ombudsman offices - Insurance Ombudsman Offices

 

Futher Information

I have compiled all the necessary information related to Motor Insurance, Claim Process and Grievance redressal system. For more information, visit the following official websites from Govt. of India.

IRDA Website

Website about Insurance from IRDA

IGMS Portal

Website of Insurance Ombudsman

 

Excellent and detailed information Ramesh. Specially, the escalation process is important information to know.

And I feel for two wheelers (most cases), Liability Only Policy or Third Party Policy is better to take, as we never use insurance. I was just calculating, how much extra amount I paid for my bike, on name of Package Policy.