Car insurance

[indrajit_v5]

Car insurance


Blowing the cover


Rucha Biju Chitrodia | TNN


Did you know that even after your car is stolen, you have to continue paying equated monthly instalments to the financier for at least three months—the minimum time the police take to investigate the case? After 90 days, the aggrieved consumer has to get the final non-traceability report from the police and present it to the insurer. Only then does the insured amount come to him. Till then, he continues paying for a car he does not drive anymore. Nor can he afford to finance another car.
Currently, not a single insurance cover takes care of this serious consumer grouse. And the situation is unlikely to change with the imminent freeing of insurance tariffs in January 2007.
That’s because, a source in the Insurance Regulatory and Development Authority (IRDA) explains, “Detariffing starts only with price changes and not with policy wordings, and terms and conditions. These (changes) will come in only 15 months after the regime sets in. The world over, detariffing is a step-bystep process. First, insurers have to work out the correct premiums, pricing and loading (of premiums).’’ C S Rao, chairman, IRDA, adds, “We have been telling insurers to continue the existing tariff conditions at present, as any alteration will add
to the confusion in the market.’’
So, for now, c o n s u m e r s have to sit it out. Leeladhar Singh of Navi M u m b a i , who lost his silver Indica to theft in November 2005, continued paying his EMI for the three months. “I requested my bank to stop deducting it, but they said it’s as per rules.’’ Paperwork only added to his troubles.
The 32-year-old executive lodged a theft complaint, made trips to the RTO office to get the registration cancelled, and to his financier, ICICI Bank, with complete documents. He also accompanied a bank surveyor to the parking lot, who took back photographic evidence of the site. Singh then submitted the papers and all the three keys to the insurer. “Even if you don’t submit one key, the insurance person told me, 50% gets deducted from the insured amount,’’ says Singh, knowledgeably.
In less than four months, he got adequate reimbursement of Rs 2.76 lakh against the insured value of Rs 2.77 lakh. Singh was lucky. Consumers say some case files lie with the police for nine to 12 months. During which time, EMIs unfailingly get paid.
Mahendra Dhruva, national president, Institute of Insurance Surveyors and Adjusters, offers a suggestion to insurers. “If the preliminary police report says that a car has been stolen, companies can consider part-payment of the insured amount, with a bond that the person return it in case the car is found.’’ Dhruva mentions cases of flood losses to property, where insurers have paid half the amount in advance. “This could be some sort of an extra service to the consumer.’’
Companies TOI spoke to—ICICI Lombard, National Insurance and Oriental Insurance—said they were open to the idea.
IRDA’s Protection of Policy Holders’ Interest Regulations 2001 stipulate that an insurance settlement should be made within 45 days of the receipt of all documents.
Payment must be made within seven days. In case of delay, the insurance company is liable to pay an interest at 10% per annum.

New norms: There’s still hope


Consumers are worried over reports about an imminent rise in motor insurance premiums, depending on personal factors like their eyesight, and smoking and drinking pattern. But they need not fret just yet. These will be factored in only after the market matures, and are at least two years away.
An IRDA source categorically says, “Initially, this (the criteria) will be theoretical. Personal information will have to be placed online for verification. Companies are still working out the modalities.’’Mahendra Dhruva of the Institute of Insurance Surveyors gives his take on the subject. “Things like the drinking habit cannot be checked. How can you decide the premium based on, for instance, whether one drives wearing chappals or shoes?’’After freeing of tariffs, premiums will, for starters, be fixed according to a consumer’s age, occupation, the city and locality they reside in, and little details like colour (red cars are supposed to be more accident-prone), commute and servicing habits, parking space and driving history

[salma]

hi,

If u have made a project on car Insurance, a 100 mks project then pls fwd me.

thanks