Management of Motor Claims

MANAGEMENT
OF
MOTOR CLAIMS
govindjohri@niapune.com
1
Vehicle Accident
Theft cases
Garage
MOTOR OD
Salvage CLAIMS Surveyor
Settlement
Procedure
Labour
Spare
Parts
2
Issues in Losses!
Underwriting
Assessment
Modes of Settlement
Fraud
3
PERILS COVERED UNDER
SECTION I
Accidental external means
 Damage to vehicles
 Death or injury to third party,
occupants, driver/ cleaner/ conductor/
owner driver
 Damage to third party property
 While driving other vehicle
 Any other person driving vehicle
4
PERILS COVERED UNDER
 Accidental collision
 Collision
 Overturning
 Overturning
– Consequent upon mechanical Breakdown
or wear & tear
 Excluding damage to tyres
– Unless vehicle is damaged at the same
time
5
 Fire
 External explosion
 Self ignition
 Lightning
 Theft or attempted theft
 Malicious act
 In transit including loading & unloading
 By impact caused by falling objects
 Provided no violent disturbance of nature
(F, volcanic eruption, Eq.
6
Section I (2) Limit of Liability
 Option to repair & reinstatement
 Not to exceed actual value of parts +
reasonable cost of fittings sub to IEV or
Market value ( of motor vehicle including
accessories) whichever is less
 Cost of protection & removal < 20% of
repair cost
 Hire purchase/ mortgage agreement -
owner govindjohri@niapune.com
7
 Insuredcan authorise repairs up to limit
in schedule Subject to submitting
– Estimate of the cost
– Opportunity to ascertain necessity of
repairs & reasonableness of cost
– obsolete parts – not exceeding
manufacturers last quoted price + cost of
fitting
8
 SUBJECT TO
– Excess,
– Wear & tear & Depreciation,
– Mechanical or Electrical or Electronic or
Computer Breakdown,
– Damage to Tyres ,
– Damage to any Communication Equipments,
Reduction in Market Value
 CONSEQUENT TO REPAIRS
– Loss of Use due to accident,
– Damage to Radio,
– Record player or Tape recorder
9
EXCLUSIONS
A. Consequential Loss,( Case Study) Depreciation,
Wear and Tear, Mechanical or Electrical
Breakdown, Failures or Breakages:
B. Damage to Tyres unless the motor car is
damaged at the same time
C. Any accidental loss or damage whilst the
insured or any person driving with the
knowledge and consent of the insured is
under the influence of intoxicating liquor
& drugs govindjohri@niapune.com
10
EXCLUSIONS
 Insurer is not liable in respect of any
claim arising out of any contractual
liability
 Nuclear weapons material
 War ,invasion and allied perils
 Used for speed testing, organized racing
 For private service vehicle use for hire
or reward is not permitted under the
11
policy
GENERAL EXCEPTIONS
(APPLICABLE TO ALL SECTIONS OF THE POLICY)
1) Geographical area/ Racing/Reliability

Trial/Intoxicating liquor or drugs, Limitations
as to use
2) Contractual liability
3) Driver’s clause – IF no DL or disqualified
from holding or obtaining such liecnce
4) Flood, volcanic /violent disturbance of nature
5) War invasion etc.
12
GENERAL EXCEPTIONS
(APPLICABLE TO ALL SECTIONS OF THE POLICY)
6. Towing disabled vehicle any liability to
itself or other vehicle
7. Overloading or strain, excess of seating
capacity as per owner ship booklet issued
by licencing authority
8. Radio activity contamination Explosives,
Nuclear components etc.
9. Death or Injury due to explosion of a
boiler forming part of or attached to or on
the vehicle govindjohri@niapune.com
13
GENERAL CONDITIONS
1. Insured's Duty (due observance of terms & conditions and
truth of answers in proposal form & accident report shall be
condition precedent to any liability)
2. Care of Motor Vehicle
3. Fraud
4. Notification of accident
5. Conduct of claim /Subrogation
6. Other Insurance (Contribution by other
Insurer)
7. Cancellation ( by 15 days notice by Regd. Letter – pro rata
refund; at the request of insured if no claim arisen short period
rate to be charged)
8. Arbitration govindjohri@niapune.com
9. Contribution( depreciation) 14
CLAIMS PROCEDURE – DAMAGE
Condition 2: Care of Motor Vehicle

Insured shall take
 all reasonable steps
 to safeguard the vehicle from loss or damage and
 to maintain it in efficient & road worthy condition
 The Company shall have at all times
 free and full access
 to examine the vehicle or any part thereof or any driver
or employee of the insured.
15
Condition 2:
Care of Motor Vehicle
In the event of any accident or
breakdown,
the vehicle shall not be left unattended
without proper precautions to prevent
further damage
If the vehicle be driven before the
necessary repairs are effected
 any extension of the damage or
 any further damage to the vehicle shall be
entirely at the insured’s own risk.

16
Condition no. 3
FRAUD
 If claim is in any way
 Fraudulent
 Overvaluation of vehicle to defraud
 Fraudulent means are used by insured
 Any willful act or connivance of insured
All benefits to be forfeited

17
Condition 4:
Notification of accident
 Notice shall be given
 in writing to the company
 immediately upon the occurrence of any accident
 In the event of any claim
 Every letter
 Writ
 Summons
Shall be forwarded immediately
 Notice shall also be given
 For knowledge of any impending prosecution in respect of any occurrence
 Immediate notice to police
 In case of theft or criminal act
 Co-operate in securing conviction
18
CONDITION NO 5. CONDUCT OF CLAIM &
SUBROGATION
 No offer without corporations consent
 Corporation has full discretion to take over
proceedings and in settlement of the claim
CONDITION 8. ARBITRATION
Condition number 8 of the policy
Quantum
Liability being otherwise admitted
difference is referred to an arbitrator
Award is a condition precedent to any right of
action against corporation 19
CONDITION 9 CONTRIBUTION
(INDEMNITY)
 INSURED TO PAY REASONABLE
CONTRIBUTION
on account of wear & tear or depreciation
on replacement of cost of new accessories
or spare parts
(a) For TL/CTL of the vehicle (incl accessories)
the IEV or MV less value of wreck.
(b) Partial losses – actual and reasonable costs of
repair, replacement of parts subject to depreciation
as per limits specified.
20
DOCUMENTS FOR DAMAGE CLAIMS
 Intimation of claims
 Claim form
 Estimate of Repairs
 Spot/ Final / Re-inspection Survey
 Final bill of repairs with satisfaction note by
the insurer
 Opinion of second surveyor/institute as
regard MV
 Cash receipt
 Loss voucher govindjohri@niapune.com
21
DOCUMENTS FOR VERIFICATION
Owner booklet of registration
Driving License -Extra Endorsements
Police report if required
Other vehicular documents in case of commercial
vehicles
Route permit
Load challan
Vehicle Fitness certificate
TOWING
Cost of protection & removal to the nearest repairer
and re-delivery > 20% OF REPAIR COST
03/20/24 govindjohri@niapune.com 22
THEFT CLAIMS
DOCUMENTS & PROCEDURE
 Immediate intimation
 First Information Report To Nearest Police
Station
 Ownership Booklet (RC). Permit, Fitness,
DL, Keys of the vehicle as may be applicable
 FIR, Ownership Booklet duly endorsed by
Licensing Authority regarding theft,
 Untraced Report duly accepted by court
 Investigation Report
23
SETTLEMENT OF THEFT CLAIMS
 Letter of subrogation
 Power of attorney
 Original Ownership Booklet, Insurance, keys,
 Transfer forms
 Cancellation of policy
 Information to Licencing authority regarding
cancellation of policy and settlement of claim .
 Payment to financier or NOC
 Current Invoice for arriving Market value
24
TYPES OF CLAIMS
 Standard Claims: Within the terms and
condition of policy
 Nonstandard claims : breach of warranty

– over loading; permit, inappropriate DL.
 Ex-gratia claims : outside the scope of

policy
– amount paid as act of grace,
– a commercial decision .
25
MOTOR DAMAGE CLAIMS REPAIR BASIS
PROCEDURE:
1. Immediate notice to nearest Office.
2. Insurer to arrange Spot Survey.
3. Insured to shift the vehicle to Garage after Spot Survey &
Prepare the estimate.
4. Approach the Office for Final Survey along with …….
1. Intimation of Accident.
2. Completed Claim Form.
3. Estimate of Repairs.
4. Police Report.
5. Photocopy of All Vehicular Documents (with
Originals for verification and return).
6. After repairs are complete, produce vehicle to
insurer for arranging Re-Inspection
26
MOTOR DAMAGE CLAIMS
 After Spot / Final / Re-Inspection Survey
 Insured to submit Cash-Memo, Bills of
repairs, Receipts of replacement of parts to
Insurer or surveyor.
 Survey report is received the claim is
processed on merit.
 Salvage to be produced for verification/
submission to insurer if so desired
27
MODE OF SETTLEMENT
1. Repair basis (Partial Loss)
2. Total Loss.
3. Net of Salvage (Total Loss without
salvage)
4. Cash Loss
5. Insured unable to repair
1. On account settlement
1a. Indemnity settlement
02. Cash loss settlement
28
Special attention to be given to the
following parts
1. Radiator
2. Water Pump / Water Pump kit
3. Battery
4. Thermostat
5. Engine Mountings
6. Wheel Rims
7. Chassis Frame
8. Front Axle I Beam
9. Stub Axle, King Pin
10. Shock Absorbers / Struts in cars
29
SPECIAL ATTENTION TO BE GIVEN TO THE FOLLOWING PARTS
AT THE TIME OF PROCESSING/SANCTIONING OF OD CLAIM
11. Spring Leaves / Suspension Parts in Cars

12. Wind shield Glass and its Rubber beading
13. Instrument panel and Meters
14. A/C Condenser
15. Rear Axle Tube
16. Internal parts viz., Engine Crankshaft, Engine
block, Pistons, Connecting Rods, Gear Box,
Internal Parts viz. Main Shaft, Counter Shaft,
Gear Wheels etc. Crown Wheel etc.
17. Steering Worm
18. Clutch Plate
19. Body Shell Parts/Door Shell etc./Body & Cabin 30
Body & Cabin
 Wooden Material
 Sheet Metal
 Hardware viz., AngleIrons, Nut-
bolts, Rivets Sun Mica / Plywood
 Beading
 Upholstery
 Painting
 Labour
31
MOTOR DAMAGE CLAIMS
SALVAGE:
When major parts are replaced:
 1. Either Salvage is deposited with
Insurers or
 2. Appropriate Value is deducted from
the claim amount or
 3. Salvage is destroyed by Insurer
where it has no economic value.
32
MOTOR DAMAGE CLAIMS
 TOTAL LOSS / NET OF SALVAGE:
 aggregate cost of repair > 75% of IEV CTL.
 Calculate all 3 modes of settlement
Total Loss, Repair Basis, Net of Salvage.
 most economical mode with consent of
insured
 Policy cancelled and Licencing authority
informed
 Salvage value deducted
 Claimant paid net of salvage
– settlement on net of salvage basis 33
DEPRECIATION ON PARTS
Rubber parts / Nylon / Plastic Parts / 50%
Tyres & Tubes / Batteries / Air Bags
Fiber glass components 30%
Glass Parts Nil
EXCESS CLAUSE
Normal excess or built in excess
Imposed excess
Voluntary excess-attracts discount in
premium govindjohri@niapune.com
34
COMPULSORY
DEDUCTIBLES
 TWO WHEELERS
 PVT.CARS BELOW 1500 CC
 PVT.CARS ABOVE 1500 CC
 TAXIES & THREE WHEELERS
 OTHER CLASS OF VEHICLES
 COMMERCIAL VEHICLES
 NOT EXEEDING Gross Vehicle Weight
 EXCEEDING Gross Vehicle Weight
35
PHOTOGRAPHING
&
CONTROL ON NEGATIVES
ROLE OF SPOT SURVEY
36
ROLE OF SPOT SURVEY
1. Verify actual place of spot
– Either covered under the permit or not
2. Quantity of load
3. Note Serial No. of major Numbered
parts
4. Verify Vehicular Documents on The
Spot
5. Ascertain T.P. Property loss.
6. Ascertain Concurrency Of Loss vs, old
losses 37
FINAL SURVEY
 To match whether loss shown co-relates
with spot report.
 To access and verify the internal
damages
 Whether parts demanded for
replacement actually require
replacement.
 To adjust the loss.
 Whether Loss as Described In Claim
Form Are Technically Possible.
38
RE-INSPECTION
 Normally arranged when the Cost Of
Replaced Parts is high
 Whether parts allowed by final surveyor has
been actually replaced
 To verify salvage.
 Whether repairs fully carried out or not
– to avoid similar claim on same vehicle
 CONCLUSION
Strict enforcement of the risk
management process will result in
restricting the excess/inflated outgo.
39
T.P.CLAIMS
 Cases filed in Court if no
Compromise
 Jurisdiction
 Limitation
 Status of deceased
 Extent of injury
40
T.P.CLAIMS DOCUMENTS
 Ownership Booklet & other vehicular
documents
 Driving Licence
 Post mortem report of deceased
 Medical Certificate
 Police Report of accident
 Income Proof of deceased
 Age proof of third party injured/ dead
41
T.P.CLAIMS
 ONLY FAULT LIABILITY
 T.P. Injury or death
 T.P.property damage consequent to
vehicle accident.
 Liability of the company - unlimited
for T.P.injury or death or Third Party
Property Damage.
42
T.P.CLAIMS
 Compensation Application on prescribed
format.
 Presiding officer
– to satisfy with the documents on record
– Hearing witnesses
– Arguments of council
 Award with interest from the date of filing.
 Insurer to satisfy the award with interest or
make an appeal.
43
RIGHT OF RECOVERY TO
INSURER
Right of any person to recover
Insured to repay the company which
it would not have been liable to pay
but for the said provisions.
44
DEFENCES AVAILABLE TO
INSURER
BREACH OF SPECEFIED CONDITION OF THE
POLICY
 Condition excluding use of vehicle
– Not covered by a Permit to ply for hire or
reward,
– For organized racing or speed testing or
– Purpose not allowed by permit
 where vehicle is transport vehicle
 without side car being attached where

vehicle is a govindjohri@niapune.com
motor cycle insured with side
car 45
DEFENCES AVAILABLE TO INSURER
 Driving by a person
– not duly licensed or
– who has been disqualified for holding or
– obtaining Driving Licence
 Liability for injury caused or contributed to
by the conditions of War, riot or civil
commotion
 Policy obtained by
– non disclosure of a material fact or
– misrepresentation of fact which was false
in some material particular is void
46
T.P.CLAIMS
Collusion between the claimant & the
insured
 where court is satisfied that
 insured failed to contest
 Insurer should be impleaded as a party to
the proceedings and
 Have right to contest on all grounds
47
APPEAL AGAINST AWARD
 Aggrieved party may prefer appeal
 Delay condonation may be done on

merits
48
T.P.CLAIMS
 The insurer exercise their right
– Taking the plea in written statement
– Cross examining witness.
 If right to take all defenses on behalf
of the insured not exercised in claim
petition,
– insurer not allowed to appeal raising
defense
 Effect of death of insured
– liability extends to his estate or survivors
49
T.P.CLAIMS -TRANSFER OF
INSURANCE
 Policy to continue with assignee
automatically
 Certificate of Insurance and Policy deemed
transferred.
 Deemed transfer includes Transfer of
Rights & Liabilities
 Assignee & Corporation may terminate
policy within three months.
50
T.P.CLAIMS
[TRANSFER OF OWNERSHIP]
 Insurer can not be held liable
– if no intimation of transfer
 Therefore it can not be brought to
justify for subsistence of cover.
 No presumption for insurer to
indemnify
51
T.P.CLAIMS- [OPTION]
Death or bodily injury under
Employers liability Provision
Compensation permitted under
either provision
NOT under both.
52
T.P.CLAIMS
Insurer has no right to prefer
appeal
– Unless impleaded and
– Allowed to defend one or more
of the grounds or situation
envisaged.
53
ADR
CONCILLIATION through
Court
●QUICK SETTLEMENT
PLAN at Corporation level
54
CONCILLIATION
PROCEDURE
 Summon Received and W.S filed
– Vehicular documents verified
– Particularly DL
– Policy and Premium payment confirmed
– Investigation Report perused for
 death, injury, police report, proof of
income, age , the case can be placed for

compromise
55
SETTLEMENT OF T.P.CLAIM
THROUGH CONCILIATION
Panel Advocates written opinion
– as regard admissibility and
– quantum for compromise.
 Placed before CONCILIATORY COURT
and compromise notes exchanged/filed
 Order passed in terms of compromise note
and payment made as per order.
56
CONCILIATION
 Beneficial for company to compromise
– Settlement in court takes longer period
– Interest is awarded from the date of filing
 Itmay save interest liability for insurers
and earn good will in society.
 Quick process
57
SUMMERY
 Hardly any safeguards to the
Insurer
 Wise to pay claims expeditiously
– Rather than wait endlessly
– Add interest burden
– Earn bad image in society
58
T.P.CLAIMS SUMMERY OF
CONCILIATION
 Benevolent/Social welfare measure
 Courts ignore non-compliance of premium
payment, pass awards without confirmation
of policy copy.
 Judiciary lenient in awarding interest.
 Judgment by Apex court
– interest award as per prevailing Bank interest.
59
Quick settlement Plan
 Avoid lengthy, Expensive legal proceeding.
 Pending cases selected for Conciliation
– Parties need not file before court
– Parties may conciliate directly
 Claimantsoption to accept or reject offer
 Cheap remedy for avoiding Court fee,
Advocate’s fee, seek quick settlement
60
Quick settlement Plan
 Panel consisting Retd. Judge,
Medical Practitioners, Retd.
Insurance Executive
 Claimant free to take assistance
from Advocate.
 Hit and Run cases not covered.
61

Management of Motor Claims

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Management of Motor Claims

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MANAGEMENT

1) Geographical area/ Racing/Reliability

Condition 2: Care of Motor Vehicle

entirely at the insured’s own risk.

All benefits to be forfeited

 Nonstandard claims : breach of warranty

 Ex-gratia claims : outside the scope of

11. Spring Leaves / Suspension Parts in Cars

Glass Parts Nil

ROLE OF SPOT SURVEY

 without side car being attached where

 Delay condonation may be done on

income, age , the case can be placed for

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