procedure

Some important points, which would help you in the claims procedure:

  • The loss or damage should be reported to the insurer immediately (within 24 hours of loss).
  • On receipt of claim intimation, the insurer will forward a claim form.
  • Submit the completed claim form along with an estimate of the loss to the insurer. It is preferable to submit an itemized estimate with separate values.
  • The insurer will arrange for inspection by an independent licensed surveyor to assess to assess the loss.  
  • The insured has to provide the required documents to substantiate the extent of loss.
  • In case the cause of loss is not established, it is for the insured to prove that the loss or damage has occurred due to an insured peril.
  • On agreement of claim amount between the insured and the insurer, the claim is settled.

Claims under Fire

  • The insured should take all possible steps to minimize the loss.
  • The fire brigade should be intimated immediately.
  • Lodge a police complaint in case of a fire arising out of - rioting mob, striking workers, malicious damage by third parties or terrorist damage.
  • Inform insurer as early as possible , in no case later than 24 hours
  • To co-operate with the surveyor appointed by the insurer and provide all relevant information and documents.

Burglary Claims / Money Insurance

  • Immediately report to the police and obtain a non-traceable certificate that the items are not found.
  • Notify insurer as early as possible (within 24 hours) and submit copy of FIR.
  • Issue letter of undertaking on a stamp paper of appropriate value - letter of Subrogation, for refunding the claim amount when the stolen property is recovered.
  • Obtain a non-traceable certificate from police that the items were not found.
  • Insured has to provide the surveyor complete book of accounts and all relevant documents substantiating the loss on the day of incidence.

Machinery Breakdown

  • Immediate notification to the insurer (within 24 hours)
  • Notice of claim and estimated cost of repairs should be filed with the insurer to arrange for inspection.
  • In case of partial losses, no depreciation is charged but when the items are not insured for its present day replacement value, the items are treated as underinsured and the claim amount is proportionately reduced. Depreciation is only applied for Total Loss claims.
  • If an appliance is partially damaged, it should be repaired (on approval from insurance company) before it is put to use, as otherwise further loss is not covered.

Electronic Equipments

  • Immediate notification to the insurer (within 24 hours).
  • Notice of claim and estimated cost of repairs should be filed with the insurers to arrange for inspection.

    In case of partial losses, no depreciation is charged but when the items are not insured for its present day replacement value, the items are treated as underinsured and the claim amount is proportionately reduced. Depreciation is only applied for Total Loss claims.
  • If an appliance is partially damaged, it should be repaired (on approval from insurance company) before it is put to use, as otherwise further loss is not covered.  

Motor vehicle claims

  • Notice of an accident involving third parties should be reported to the insurers.
  • The insured may be interested to pay compensation without going into whether he is liable to pay or not. It is therefore an express condition of the policy that no claim should be admitted or a compromise arrived at, without the approval of the insurers.

Claims under Comprehensive policies

Steps to be taken in case of an accident:

  • Notice of accident should be filed with the insurers.
  • If damage is a major one, the accident should be reported before the vehicle is removed from the spot so that the insurers can arrange for spot inspection of damage.
  • The vehicle may then be moved to a workshop designated by insurance company  for estimation of repair charges.
  • On receipt of completed claim form and estimate of repairs the insurers will arrange detailed inspection of damage and cost of repairs will be ascertained.
  • The insurers will ensure that a person duly licensed drove the vehicle at the time of accident and that the vehicle is the one insured in their books. To that end, they will verify the Registration Certificate and the Driving license of the driver who drove at the time of the accident.
  • Upon completion of the above procedure, the repairers will be authorized to carry out repairs. The insurer may undertake to settle the repair bills directly with the garage or reimburse the insured.
  • Insurers would like to collect the damaged parts for which replacements have been allowed, as salvage. To ensure that replacements with new parts, have in fact, been effected.
  • In case of theft of the car or its accessories, it has to be reported to the police and final report should be submitted.

Glossary
Claim parties:

  • The First party is the person/ company insured.
  • The Second party is the specific insurance company.
  • The Third party refers to anyone else who is involved in a loss event. It may be vehicle owners, property owners or persons such as passengers or pedestrians

Utmost good faith (Uberrima fides):
In simple terms it means that the insurer and the insured have a duty to deal honestly and openly with each other in the negotiations that lead up to the formation of the insurance contract. Parties have the duty

  • Not to misrepresent any matter relating to insurance i.e. to tell the truth
  • To disclose all material facts relating to contract i.e. not to conceal anything.

Material facts:
Every circumstance is material which would the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk.
Burden of proof:
Burden of proving the loss remains with the insured, he must establish two things:

  • That the loss was caused by the operation of an insured peril
  • The amount of loss

Average Clause:
An average clause provides that where the sum insured is less than full value of goods, the insured will bear the uninsured part of the risk and the claim payment for any loss will be scaled down proportionately. This clause is also called pro rata average clause.
Excess (or deductible):
It provides that the insured must bear the first amount of any loss, expressed either as a sum of money or a percentage of the loss or sum insured. Excess could be voluntary or compulsory.
Subrogation:
It is the right of insurance company, having paid the loss under the policy, to stand in the place of insured and purse legal right or claim against other persons for the same loss.
Salvage:
The right of the insurer to take over the subject matter after partial or total loss is known as salvage.
Contribution:
Contribution prevents the insured from making a profit from his loss. It is the right of the insurer to call upon other insurance companies not necessarily equally liable to the same insured to share the cost of claim payment. Contribution will arise only when the following conditions are satisfied:

  • Two or more policies of indemnity exist
  • Each insures the subject matter of the loss

Each insures the peril which brings about the loss

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