Faster claim settlements needed for flood victims
Extraordinary situations call for extraordinary responses. I refer to the role of the insurance regulator in the aftermath of the Uttarakhand calamity and the need for a special monitoring cell to ensure quick settlement of insurance claims for the victims of the flood disaster.
The regulator should come up with specific guidelines for insurers on dealing with claims arising out of large-scale disasters and ensure that these guidelines are strictly adhered to, through a monitoring cell and a consumer helpline. Since most consumers are not well versed with the requirements of filing a claim, insurance companies should be first asked to issue advertisements on how to file a claim and the documents required (or not required in special circumstances such as these) and then process them quickly and hand over the amount to the victims without delay.
Once the process is completed, the Insurance Regulatory and Development Authority (IRDA) should collect detailed information on claim settlement from each insurer - and analyze the data to assess the performance of insurance companies and find out whether they really did rise to the occasion or only paid lip sympathy.
The claims would not only be from the pilgrims/tourists, but from the locals as well and can pertain to destruction of buildings and vehicles, loss of business, livelihood, livestock, death, disability and health care. Since there are also a number of state-sponsored insurance policies for the underprivileged, for farmers, etc., there could be a large number of claims arising from these policies and this is where close monitoring is specially needed.
Will insurers, particularly general insurance companies, respond with alacrity to these claims? My skepticism also arises from the fact that the largest number of complaints before the consumer courts are against insurers and they often invite the wrath of the consumer courts for unjustified repudiation and needless (or uncalled for) litigation.
I recall a case decided by the Uttarakhand State Consumer Disputes Redrssal Commission last year (Oriental Insurance Vs Smt Bhagwanti Devi, FA NO 105 of 2007) wherein despite strong evidence confirming that the insured — a farmer — had died of snake bite while working in the field, the insurer had repudiated the claim on the ground that he had died of heart attack and therefore not entitled to the benefits under the Janata Personal Accident Policy.
Even after the District Forum asked the insurer to pay the insured amount of R75,000 and pay R10,000 as compensation, the latter had appealed against the decision before the state commission and I would not be surprised if a revision petition has been filed before the national commission.
The need of the hour is for insurers to ensure that those claimants who have undergone tremendous trauma and suffered acute losses are not harassed further and that their claims are settled in a simple and quick manner.
P. Sahni: Even though my claim under the Shopkeeper’s Insurance Policy was settled after a delay of two years, the insurance company refused to pay any interest on the amount. How do I recover this from the company?
Answer: Under the IRDA ( Protection of Policyholders’ Interests) Regulations, 2002, every insurance company has to pay interest (2% more than the prevailing bank rate) on delayed settlement of claims. Similarly, under the Consumer Protection Act also, delay in the provision of services (including settlement of claims) is considered ‘deficiency’ in the service rendered and a consumer is entitled to compensation for the loss or harassment suffered on account of such deficiency. So please write formally to the insurer pointing this out and if you still do not get the interest, complain to IRDA (complaints@irda.gov. in) about the violation of its Regulation.