Page 204 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Unit 11: Motor Insurance

Self Assessment Notes

Fill in the blanks:
3. …………………………………. repairs arising out of damage covered by the policy can be
carried out only after they are authorized by the insurers.

4. The insured’s liability for damage to property of third parties is limited to
…………………………………..
5. The insurers are liable for the death of or bodily injury arising out of and in the course
of……………………………., but only to the extent necessary to meet the requirements of
the Motor Vehicles Act.
6. The insurer’s liability cannot exceed the insured’s ……………………………….. value of
the vehicle.

11.3 Procedure for Payment of Claims

In this section, we will discuss about the procedure for payment of claims. On receipt of notice
of loss, the policy records are checked to see that the policy is in force and that it covers the
vehicle involved. The loss is entered in the claims register and a claim form is issued to the
insured for completion and return. The insured is required to submit a detailed estimate of
repairs from any repairer of his choice. Generally, these repairs are acceptable to the insurers
but they at times ask the insured to obtain repair estimate from another repairer, if they have
reason to believe that the competence, moral hazard or business integrity of the repairer first
chosen is not satisfactory.

Assessment

Independent automobile surveyors with engineering background are assigned the task of
assessing the cause and extent of loss. They are supplied with a copy of the policy, the claim form
and the repairer’s estimate. They inspect the damaged vehicle, discuss the cost of repair or
replacement with the repairer, negotiate as per the indemnity, and submit their survey report.
In respect of minor damage claims, independent surveyors are not always appointed. The insurer’s
own officials or their own automobile engineers inspect the vehicle and submit a report.

Settlement

The survey report is examined and settlement is effected in accordance with the recommendations
contained therein. The usual practice is to authorise the repairs directly with the repairer to
whom a letter is issued to that effect. In this letter, the repairers are also instructed to collect
direct from the insured the amount of the excess, depreciation, salvage, etc. if applicable to the
claim, before delivering the repaired vehicle to him. The repairers are also instructed to keep
aside the salvage of damaged parts, if there are any, for being collected by the salvage buyer
nominated by the Insurers. Or else, if the repairers are willing to retain the salvage, its value, as
indicated by the surveyor, is deducted from the claim bill.
On receipt of their final bill of repairs after completion of repairs and a satisfaction note or
voucher from the insured that the vehicle has been repaired to his satisfaction, the payment to
the repairer is affected.

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