With large number of people purchasing personal vehicles, motor vehicle insurance has become the most sought- after insurance product. The number of claims too are increasing every year.
TYPE OF CLAIMS
Motor vehicles insurance claim has been classified into two categories: cashless claim and reimbursement claim.
Cashless claim: You need not pay money in advance for the repair work in the event of damages to the vehicle. The expenses incurred for repair would be paid directly by insurer to the network garages. The customer only need to pay only the applicable depreciation and deductibles.
The rate of depreciation depends on the wear and tear of the vehicle and the reduced value of some parts. For example the rate of depreciation of fibre glass parts is 30 per cent. This means if there are damages in those parts then the insurer would pay 70 per cent of the total expense.
The remaining 30 per cent expense has to be borne by the policy owner. This is compulsory deductible or the amount of money that the insured pays in case of a claim.
For instance if the depreciation amount is Rs 2,000 and the claim is Rs 6,000, the insurer will pay the remaining Rs 4,000.
Reimbursement claim: Under the reimbursement claim you can take the insured vehicle for repair to any garage (outside the network garage). You will have to pay the expenses and subsequently you should apply for reimbursement to the insurer. All receipts and bills from the workshop should be asked for and kept in safe possession. The insurer will provide the payment only after examining all claim documents and bills.
There are three types of liability claims: third-party liability coverage, bodily injury liability and property damage liability.
Third Party (TP) coverage or the third-party insurance is mandatory as per law. The TP insurance covers your own liability and also pay for the medical expenses of the third party injured by your vehicle or the damage caused to his vehicle.
The TP section does provide coverage to you or your vehicle. In case if you are the third party in an accident then you should immediately register an FIR. The TP insurance details are to be gathered from the vehicle owner. The claim has to be filed before the Motor Vehicles Claims Tribunal. The claim can be filed at the place of your residence or at the place where the accident took place.
A compensation claim can be made by a third-party or by the vehicle owner.
Third-party compensation claim: A third-party compensation claim can be made under vehicle insurance. The claims can be filed
* for disability caused because of accident
* for losing source of income due to disability
* against the treatment cost
* for property damages.
The compensation claim can be filed by the the next of kin in the event of your death in the accident.
Own Damage compensation claim or OD claims are related to the damages caused to your vehicle in accident. As a first step the information has to be passed on to the police or the insurance agency. The vehicle should not be moved from the site of accident without their permission. Once you obtain the permission, the vehicle can be taken for repair. The insurer will make the payment either in cashless mode of through reimbursement.
(The author is Chief Technical Officer, Bajaj Allianz General Insurance.)