Unlike most other liability insurances, third-party car insurance is mandatory as per the Motor Vehicles Act, 1988. Driving an uninsured vehicle will attract a fine and three months imprisonment.
The owner must therefore procure third-party car insurance at the time of purchase of a new car itself. Such insurance will be for a specified term period, which is usually one year.
Importance of Making the Claim on Time
To settle your claim quickly – any delay in raising the claim will result in the claim settlement being delayed.
To complete the inspection of the vehicle on time - If one happens to get the vehicle repaired without waiting for the survey to be completed, he or she will face problems in the claim settlement process.
In the worst-case scenario, the claim might even get rejected by the insurance company. So, informing the insurance company on time ensures that the survey is completed at the earliest and one can get the repairs done at the earliest without much hassle.
To prevent further loss caused as a consequence of late reporting – if one takes the damaged car to the garage without informing the company on time, then one will face consequential losses which are exclusions under a standard car insurance policy.
A timely claim intimating can help one avoid consequential loss and reduce out-of-pocket expenses.
What are the Steps to Make the Claim in Case of an Accident?
- Step 1: Inform the company about the accident at the earliest. The time within which this information has to be passed on to the insurer will be mentioned in the policy document itself, so be mindful of those timelines.
- Step 2: It is in this interim time period that the third-party would resort to lodging an FIR at a police station closest to the accident site.
- Step 3: A case (in the form of a petition) will be filed by the injured third-party in the Motor Accident Claims Tribunal (MACT) to that effect. It is usually filed in the tribunal which has jurisdiction over the area where the accident occurred or it has jurisdiction over the area that the insured resides in.
The insured and the insurer will be made respondents to the claim petition. The compensation to be awarded to the third- party will be decided by the tribunal – there is no upper limit in case of personal injuries and limited liability of insurance of up to INR 7.5 lakhs in case of property damage.
- Step 4: Once the MACT conclusively adjudicates the matter, the compensation amount awarded will be paid by the insurer to the aggrieved party if the claims are so proved before the tribunal.
- Step 5: A claim form shall be submitted to the insurer thereafter with all the requisite documents. Ensure that you reconfirm the cover amount before filling in the claim form.
- Step 6: The claim amount will be paid to the third-party directly by the insurance company absolving the policyholder of all liabilities.
How is the Claim Process Different in Cashless and Reimbursement Car Insurance Policies?
These are the common steps for both cashless and reimbursement claim settlement process –
- Inform the company about the accident at the earliest. The time stipulated will be provided in the policy document itself.
- Submit a claim form along with requested "proof of loss" documents in the correct format to the car insurance company.
- A surveyor will be appointed to inspect the car and assess the damage caused.
For a cashless claim process, the following additional steps will be followed–
- Post-inspection, the company will approve, modify or reject the claim amount, as deemed fit.
- When approved, if there arises a situation when the insured is required to make some additional payment an intimation will be duly provided.
- Insurers will make payments to the preferred garage accordingly, on completion of repair works.
For a reimbursement claim, the following additional steps will be followed–
- Payment will be made by the insured directly to the workshop or garage.
- All bills, receipts, and documents (in original) have to be submitted to the insurance company.
- The insurer will reimburse the amount spent to the insured, if the claim is accepted, within a stipulated period.
Care must be taken that these clauses are perused before any claim statement is filed to prevent rejection based on these exclusionary clauses.
For example, damages caused when the car has been driven under the influence of alcohol or in the absence of a valid driver’s license is a standard exclusionary clause that prevents the insured from encashing the claim amount.
Conclusion
Filing the car insurance claim might seem like a long-drawn, daunting process, but with a little legal assistance, the process will be completed with ease. Being informed about the procedure to file the claim while purchasing the policy itself is advisable. Follow the procedure through and through for your own benefit!
