Internship Report

Problems & Prospects: Claims of Oriental Insurance

Company Limited

Submitted To:
DR. N.S PUROHIT
Lecturer
SCHOOL OF INSURANCE STUDIES
NATIONAL LAW University

Prepared & Submitted By:

Name: AKSHAY JINDAL
Student ID: (Roll-767)
Date of Submission: JUNE 17 2016

Letter of Transmittal
JUNE 17 2016

DR. N.S PUROHIT

SIS-NLU
JODHPUR

Subject: Submission of Internship Report.

Dear Sir,
With due respect, I would like to inform you that, I have completed my
internship at Oriental Insurance Company Limited. Throughout the
internship period, I have found the company getting ready to adopt with
new methods and techniques. Hence, I chose The Problems & Prospects
of Claims Settlements and Procedure as the topic of my internship report.
In order to prepare the report, I have collected required information
through qualitative sources and finally completed the report which is now
ready to submit. It was really enjoyable to work on the report as it has
provided me with an opportunity to know about realistic facts. I have
learned a lot about the non-life insurance industry and got the chance to
apply my theoretical knowledge learnt from the university courses. It was a
great pleasure for me to work on such a challenging and practical topic. I
shall be highly glad if you kindly receive this report and provide your
valuable judgment. It would really be my immense pleasure if you find this
report useful and informative.

Sincerely yours,
____________
AKSHAY JINDAL
ROLL NO-767

Acknowledgement

The successful completion of this report on The Problems & Prospects of Claims
Settlements and Procedure has been possible from many helping hands.
However, the space inadequacy does not allow me to mention everybody
individually. At first I am very thankful to Mr. Abhishek Gurjar (A.O) & my on-site
supervisor, who helped me a lot in understanding the important practical role
and procedures of organization. I would like to express gratitude to him and his
company (OICL), since they opened a great platform for me to learn & grow.
My special thanks and sincere gratitude goes to Mr. K.C BEHL (C.R.M), Mr. D.K
ARORA (R.M) and Mr. PRADEEP KUMAR AHUJA (Manager) of the Regional office of
OICL, Vadodara (Guj.) for providing me with necessary information for preparing
the report.
And, of course, my heartfelt gratitude and respect goes to DR. N.S PUROHIT
AND DR. R.K PUROHIT, my academic supervisor of the Internship Program of
SIS-NLU University. I sincerely appreciate their interest and valuable guidance in
preparing this resourceful report and the significant assistance in choosing the
topic of my report. I would like to thank them for the proper direction through
valuable discussions and personal advice & support; and especially for the
valuable feedback before submitting the final report.
Lastly, I would like to thank School Of Insurance Studies of National Law
University for the development of such an important & firm curriculum of the
internship program required for MBA.

Introduction

The Oriental Insurance Company Ltd was incorporated at Bombay on 12th

September 1947. The Company was a wholly owned subsidiary of the Oriental
Government Security Life Assurance Company Ltd and was formed to carry out
General Insurance business. The Company was a subsidiary of Life Insurance
Corporation of India from 1956 to 1973 ( till the General Insurance Business was
nationalized in the country). In 2003 all shares of our company held by the
General Insurance Corporation of India have been transferred to Central
Government.
The Company is a pioneer in laying down systems for smooth and orderly
conduct of the business. The strength of the company lies in its highly trained
and motivated work force that covers various disciplines and has vast expertise.
Oriental specializes in devising special covers for large projects like power
plants, petrochemical, steel and chemical plants. The company has developed
various types of insurance covers to cater to the needs of both the urban and
rural population of India. The Company has a technically qualified and
competent team of professionals to render the best customer service.
Oriental Insurance made a modest beginning with a first year premium of
Rs.99,946 in 1950. The goal of the Company was Service to clients and
achievement thereof was helped by the strong traditions built up overtime.
ORIENTAL with its head Office at New Delhi has 31 Regional Offices and nearly
1800+ operating Offices in various cities of the country. The Company has
overseas operations in Nepal, Kuwait and Dubai. The Company has a total
strength of around 14,000+ employees. From less than a lakh at inception, the
Gross Premium went up to Rs.58 crores in 1973 and during 2014-15 the figure
stood at a mammoth Rs. 7561 crores.

Scope of the Report

Insurance industry is one of the growing sectors in India .To ensure the
smooth

operation

of

the

concerned

insurance

companies,

the

regulatory bodies try to pass and implement new acts & regulations.
There are 29 non life insurance in our country & there have been
passed several acts to regulate those companies properly. Oriental
Insurance Company Limited is

public sector non-life insurance

company in India that serves with a variety of services to its valued

customers. Due to the limitation of my report my scope was limited to
OICL.

Objectives of the Study

Purpose tells the reason of the report. Before going to the organization I set my
objectives that guided me until I finished the report. It always kept me focused
to be on right track. The objectives are:

General Objective
To know the problems and prospects of the insurance industry in claim
settlement and procedure.

Specific Objective
The specific objectives of preparing the report were as follows:
To know about the emergence problems in claim settlements.
To know the changes that have already been brought and also need to be
brought in OICL to ensure the implementation of the new techniques.
To find out the changes/addition/deduction of the new procedure compared
to the old ones.
To identify the major problems faced by the insurance industry due to
passing the claim settlements and also the prospects of the insurance
industry, particularly of the OICL due to their implementation.
To apply instantly what I have learned from the observations.
To come up with the exact information about the regulatory system from
both the business point of view and the regulators point of view.
To identify associated problems in the observations & research and to
recommend actions required to mitigate the problematic situation in the
insurance industry.

Limitations
The preparation of this report was not an easy task. I had to face some
problems & limitations during the preparation of this report despite the fact that
I have tried my best to prepare this project successfully. The limitations were:

The Insurance rules & regulations regarding claim procedure and settlement
including most of the other supporting documents are written and published in
India. Understanding the entire current prevailing and relevant information of
OICL was quite difficult.
Confidential information that no organizations inclined to share due to their
business interest was another limitation.

Company Overview

Oriental Insurance Company Ltd was established on September 12, 1947 in the
then Bombay. It was a completely owned subsidiary of Oriental Government
Security Life Assurance Company Ltd. It was created with the mandate of
executing its parent bodys general insurance operations.

Oriental Insurance Company

Workforce
Oriental Insurance Company is a ground breaker when it comes to proper
business coordination. It has a highly motivated and skilled work force that has
a diverse expertise and can deal with various areas and is the major area of
strength for the organization. It also has a customer service team that
comprises some efficient people with high levels of technical qualification. In all,
it has more than 15 thousand employees.

Oriental Insurance Business Profile

Oriental Insurance is a specialist with regards to creating special covers for big
projects such as power plants, chemical and steel plants, and petrochemicals.
Over the years, the company has been coming up with products that have
catered to the interests of both rural and urban populations in India.

Oriental Insurance Company Ltd

Office Network
The headquarters of Oriental Insurance Company Ltd are at New Delhi. The
organization has 30 regional offices and more than 900 operational offices.

Oriental Insurance Company

Management
Dr. AK Saxena operates as the Chairman cum Managing Director of Oriental
Insurance Company. The board of directors at this organization comprises some
well
known
names
from
different
domains.
Following are the directors of the insurer:
KR Kamath
SK Chanana
Lalit Kumar
NK Singh

The General Managers of Oriental

Insurance Company are:
SK Chanana
KK Rao
Niraj Kumar
HG Rokade
NK Singh
The Chief Vigilance Officer of the insurer is Nawang Tobdan and the company
secretary is Rashmi Bajpai.

Oriental Insurance Company News

Oriental Insurance Company has recently remitted dividends worth INR 50.67
crores for the fiscal 2011-12 to the Indian government. The dividend check was

presented to P Chidambaram, the Union Finance Minister by the following

officials:
Dr. AK Saxena
SK Chanana
DK Mittal
NK Singh

Our Corporate Vision

TO BE THE MOST RESPECTED & PREFERRED
INSURER IN THE MARKETS WE OPERATE.

NON-LIFE

Our Corporate Objectives

TO ENSURE THAT WE
1. ACT AS A FINANCIALLY SOUND CORPORATE ENTITY WITH HIGH BUSINESS
ETHICS
2. IMPLEMENT BEST HUMAN RESOURCE DEVELOPMENT PRACTICES TO BUILD
A HIGHLY EFFICIENT, DEDICATED AND MOTIVATED WORKFORCE WITH HIGH
MORALE AND MORAL VALUES
3. OPTIMALLY UTILIZE THE INFORMATION TECHNOLOGY INFRASTRUCTURE
4. PROVIDE EXCELLENT CUSTOMER SERVICE
5. RUN THE BUSINESS PROFITABLY THROUGH PRUDENT UNDERWRITING AND
EFFICIENT & PROPER CLAIM MANAGEMENT
6. EFFECTIVELY MANAGE OUR REINSURANCE OPERATIONS

7. EFFECTIVELY MANAGE OUR INVESTMENTS FOR OPTIMISING YIELD

8. HAVE EFFECTIVE RISK MANAGEMENT SYSTEMS
9. IMPROVE THE PENETRATION OF NON-LIFE
UNDERWRITING, INNOVATION & MARKETING

INSURANCE

BY

PROPER

Financials
The Company's Gross Direct Premium Income in India during the year 2014-15
(Audited) was Rs.7561.93 crores and the Premium Income outside India was
Rs.153.97 crores. The Gross Direct Premium in India & abroad showed a growth
of 3.83%. The Net Premium Income (Domestic and Foreign), on the other hand
grew by 1.42% to Rs. 6472.39 crores in 2014-15.

TO EVOLVE AS A VIBRANT & DYNAMIC LEADING NON-LIFE

INSURER

The Internship Program

Underwriting Department
Fire Section
Marine Section
Motor Section
Miscellaneous Section

Finance & Accounts Department

Accounts Section
Finance & Cash Section
Internal Audit Section

Administrative Department
Front Office
Back Office

Claim Department
Claim Receiving Section
Claim Settlement Section

Marketing & Business Development Department

Business Promotion Unit
Sales & Business Expansion Unit

Responsibilities: My Assigned
Department

The finance & accounts department of OICL takes responsibility for organizing
the financial and accounting affairs including the preparation and presentation
of appropriate accounts, and the provision of financial information for managers
& stakeholders. It is the one of the most important departments of the head
office of Peoples Insurance Company Limited. One can have a complete view of
the functions and monthly expenses of the company from the finance &
accounts department. The functions the department include managing,
controlling and recording the inflow and outflow of cash from the daily basis to
monthly and annual basis. It is very difficult job to record all the expenditure of
the company which increases the importance of account department in the
company.

The basic functions of the department of finance & accounts are as follows:

Planning & establishing budget

Posting (Underwriting, journals etc.)
Billing and keeping proper record
Petty cash management
Bank reconciliation
Maintain cash book & bank book

Preparation of financial statements

Analysis of financial statements
Tax & VAT calculation
Preparation & submission of organization contributed tax return of the

employees.
Conducting internal audit through the internal control unit.
Financial reporting to the management & to the stakeholders when
necessary
Maintaining payroll.
Maintaining liaison with the banks & other financial organizations etc.

Insurance
Meaning & Definition of Insurance
It is a contract in which one party known as the insured also known as assured,
insures with another party (person or organization), known as the insurer,
assures or underwrites his property or life, or the life of another person in whom
he has a pecuniary interest, or property in which he is interested, or against
some risk or liability, by paying a sum of money as the premium. Under the
contract, the insurer agrees to indemnify the insured against a loss which may
accrue to the other on the happening of some event. According to Investopedia,
Insurance is-- A contract (policy) in which an individual or entity receives
financial protection or reimbursement against losses from an insurance
company. The company pools clients' risks to make payments more affordable
for the insured. At present, insurance is being used widely and becoming more
and more popular both in personal life and in the business sector as a
significant risk management tool which is primarily used to hedge against the
risk of a contingent, uncertain loss. Insurance contract provides financial
protection to the insured by the insurer against a loss arising out of happening
of an uncertain event. The insured can avail this protection by paying premium
to any insurance company with whom the contract has been made. Insurance
works on the basic principle and concept of risk-sharing. When a company
insures an individual entity (the insured), there legal requirements to share the
risks associated with the insured by the insurer, breaking of which contract
creates legal bindings. A great advantage of insurance is that it spreads the risk
of a few people over a large group of people exposed to risk of similar type and
the re-insurance system makes the total risk at zero level in the long run. On
the one hand, insurance can increase fraud; on the other it can help societies
and individuals in preparing catastrophes and in mitigating the effects of
catastrophes on households, business operations and societies.

Features of Insurance
Insurance has various effects on society through the way that it changes who
bears the cost of losses and damage of the insured according to the insurance
contract. The distinguished common features of any insurance are as follows:
Shifting or transferring risk of loss or damage of any life, asset, or property from
one party to another party. Sharing of losses by members of the group/company
One party undertakes the loss incurred on the insured property or asset of the
other party. The risk is shared/ accepted by the insurer for a consideration of
money from the insured called as Premium (No risk to be assumed unless
premium is received in advance). It is assured to the insured by the insurer that
the amount will be paid on happening of the specified act or event. E.g. Death,
Fire, Burglary, Accident, Any peril in Sea etc.

Parties of Insurance Contract

As insurance business has insurance contract, there are mainly two parties in
the contract --Insurer : ( The person who undertakes the risk under the contract)
Insured: ( The person to whom the undertaking is given)
The Insurer can be any of the following mentioned below: An individual
Unincorporated body of individuals, Body corporate ( established by the
Companies Act) An Association of partnership firm Registered, Any other agency
permitted under any other Law in Bangladesh In order to lower the huge
amount of insurance risk, insurance companies intend to re-insure their contract
with any other (mostly larger) local of foreign insurance companies.

History of Insurance in India

In India, insurance has a deep-rooted history. Insurance in various forms has
been mentioned in the writings of Manu (Manusmrithi), Yagnavalkya
(Dharmashastra) and Kautilya (Arthashastra). The fundamental basis of the
historical reference to insurance in these ancient Indian texts is the same i.e.
pooling of resources that could be re-distributed in times of calamities such as
fire, floods, epidemics and famine. The early references to Insurance in these
texts have reference to marine trade loans and carriers' contracts.
Insurance in its current form has its history dating back until 1818, when
Oriental Life Insurance Company[3] was started by Anita Bhavsar in Kolkata to
cater to the needs of European community. The pre-independence era in India
saw discrimination between the lives of foreigners (English) and Indians with
higher premiums being charged for the latter. In 1870, Bombay Mutual Life
Assurance Society became the first Indian insurer.
At the dawn of the twentieth century, many insurance companies were founded.
In the year 1912, the Life Insurance Companies Act and the Provident Fund Act
were passed to regulate the insurance business. The Life Insurance Companies
Act, 1912 made it necessary that the premium-rate tables and periodical
valuations of companies should be certified by an actuary. However, the
disparity still existed as discrimination between Indian and foreign companies.
The oldest existing insurance company in India is the National Insurance
Company , which was founded in 1906, and is still in business.
The Government of India issued an Ordinance on 19 January 1956 nationalising
the Life Insurance sector and Life Insurance Corporation came into existence in
the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16
non-Indian insurers as also 75 provident societies245 Indian and foreign
insurers in all. In 1972 with the General Insurance Business (Nationalisation) Act
was passed by the Indian Parliament, and consequently, General Insurance
business was nationalized with effect from 1 January 1973. 107 insurers were
amalgamated and grouped into four companies, namely National Insurance

Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance
Company Ltd and the United India Insurance Company Ltd. The General
Insurance Corporation of India was incorporated as a company in 1971 and it
commence business on 1 January 1973.
The LIC had monopoly till the late 90s when the Insurance sector was reopened
to the private sector. Before that, the industry consisted of only two state
insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General
Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary
companies. With effect from December 2000, these subsidiaries have been delinked from the parent company and were set up as independent insurance
companies: Oriental Insurance Company Limited, New India Assurance
Company Limited, National Insurance Company Limited and United India
Insurance Company Limited.

Legal structure

The insurance sector went through a full circle of phases from being
unregulated to completely regulated and then currently being partly
deregulated. It is governed by a number of acts.
The Insurance Act of 1938[4] was the first legislation governing all forms of
insurance to provide strict state control over insurance business.Life insurance
in India was completely nationalized on 19 January 1956, through the Life
Insurance Corporation Act. All 245 insurance companies operating then in the
country were merged into one entity, the Life Insurance Corporation of India.
The General Insurance Business Act of 1972 was enacted to nationalize about
100 general insurance companies then and subsequently merging them into
four companies. All the companies were amalgamated into National Insurance,
New India Assurance, Oriental Insurance and United India Insurance, which were
headquartered in each of the four metropolitan cities.Until 1999, there were no
private insurance companies in India. The government then introduced the
Insurance Regulatory and Development Authority Act in 1999, thereby deregulating the insurance sector and allowing private companies. Furthermore,
foreign investment was also allowed and capped at 26% holding in the Indian
insurance companies.
In 2006, the Actuaries Act was passed by parliament to give the profession
statutory status on par with Chartered Accountants, Notaries, Cost & Works
Accountants, Advocates, Architects and Company Secretaries.A minimum
capital of US$80 million(Rs.400 Crore) is required by legislation to set up an
insurance business.

Insurance education
A number of institutions provide specialist education for the insurance industry,
these include;
National Insurance Academy, Pune, specialized in teaching, conducting
research and providing consulting services in the insurance sector. NIA
offers a two-year PGDM program in insurance. NIA was founded as Ministry
of Finance initiative with capital support from the then public insurance
companies, both Life (LIC) and Non-Life (GIC, National, Oriental, United &
New India).
Institute of Insurance and Risk Management, Hyderabad, was established
by the regulator IRDA. The institute offers Postgraduate diploma in Life,
General Insurance, Risk Management and Actuarial Sciences. The institute
is a global learning and research center in insurance, risk management,
actuarial sciences. They provide consulting services for the financial
industry.
Amity School of Insurance Banking and Actuarial science (ASIBAS) of Amity
University, located in Noida and established in 2000, offers MBA programs
in Insurance, Insurance and Banking, and M.Sc./B.Sc. actuarial sciences to a
Post Graduate Diploma in Actuarial Sciences.
Pondicherry University is offering mba in insurance management.
Pondicherry university is the only central university which offers insurance
management in India.
Birla Institute of Management Technology is a graduate business school
located in Greater Noida, established in 1988, offers a PGDM-IBM program
in insurance business management. This program was launched in 2000 by
the Centre for Insurance and Risk Management and is accredited by the
Insurance Regulatory and Development Authority. Life Office Management
Association (LOMA), USA is BIMTECH's educational partner and BIMTECH is
an approved centre for LOMA examination. The Chartered Insurance
Institute (CII), UK has accorded recognition (by way of credits) to the
BIMTECH PGDM-IBM program. Their two-year PGDM program in insurance
business has been recognized as equivalent to the Associate level of the
Insurance Institute of India, Mumbai.
National Law University, Jodhpur offers a two-year MBA and one year MS
(for engineering graduates) program in insurance.

To become an insurance advisor in India, Insurance Act, 1938 mandates that the
individual has to be "a Major with sound mind". After the advent of IRDA as
insurance regulator, it has framed various regulations, viz. training hours,
examination and fees which are amended from time to time. Since November
2011 IRDA has introduced a syllabus (IC-33) conceived and developed by CII,
London. The syllabus mainly aims to make an Insurance Agent a financial
professional. Recent Initiatives: On 09 th May 2015 NDA Government led by
Shri.Narendra Modi initiated three social Insurance Security schemes named
ATAL PENSION YOJANA,PRADHAN MANTHRI JEEVAN JYOTHI YOJANA, PRADHAN
MANTHRI SURAKSHA YOJANA on a massive scale such as 8 crore people joined
in these schems in just 03 weeks and still the number growing.

THIRD PARTY CLAIMS

In a third party insurance policy the first party is the insured and the second
party is the insurance company. The third party here is any third person. . Under
your third party insurance, a third party can file a claim for compensation for
injury, death, property damage caused by your car.

Who is the third party in a car accident?

When you file a car insurance claim, it can be either a first party claim or a third
party claim. A first party claim involves your insurance company, while a third
party claim involves the insurance company of the other driver in an accident.

What is a Third Party Claim?

A third party claim is a claim by a person, or the dependants of a person, who
received a bodily injury or who died as a result of a motor vehicle accident
caused by the negligent driving of a motor vehicle.

What does third party car insurance cover?

Third party insurance is the legal minimum. This means you're covered if you
have an accident causing damage or injury to any other person, vehicle, animal
or property. It doesn't cover any other costs like repair to your own vehicle.

How long do you have to make a claim after an accident?

When you are involved in an auto accident involving injury or property damage,
you need to report it to your insurance agent, broker, or insurance company
within seven days, regardless of who is at fault. If you are unable to report the
accident withinseven days, report it as soon as possible after that.

5 things you must know about third-party

motor insurance claims

Claimant
An application for a third-party claim can be made against the vehicle owner by
the victim or his/her agent, the owner of the property, which has suffered
damage or the legal representative of the deceased.

Police complaint
A first information report (FIR) must be filed with the police, quoting the
registration number of the vehicle involved in case of an accident, licence
number of the driver, and the names/contact details of witnesses, if any.

Claims tribunal
A case has to be filed with the Motor Accident Claims Tribunal, with jurisdiction
over the area where the accident occurred or where the claimant resides.

Documents
A copy of the FIR and the original records of expenses incurred by the claimant
must be presented to substantiate the damages/loss.

Cover amount
In case of an accident that causes injury or death, the limit for third-party cover
has not been defined. The entire compensation is borne by the insurance firm
once the court decides on the amount.

Points to not

The victim has to establish negligence on the part of the vehicle owner to claim
damages from him and his insurer.
Compensation for the damage cannot be claimed more than once. Hence, the
victim cannot expect his/her insurer to make up for any shortfall in the
compensation that has been decided by the court.

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 repairers estimate. They inspect the
damaged vehicle, discuss the cost of repair or 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 insurers 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 effected. Sometimes, the repairer is paid directly by the insured in
which case the latter is reimbursed on submission of a receipted bill from the
repairers. In either case, discharge voucher or receipt is obtained. The Claims
Register and the policy and renewal records are marked that the claim is paid
indicating the amount of claim and the amount of salvage, if any. Claims
Documents Apart from claim form and Survey report the other documents
required for processing the claim are:
1) Driving Licence
(2) Registration Certificate Book
(3) Fitness Certificate (Commercial Vehicles)
(4) Permit (Commercial Vehicles)
(5) Police Report (Taxis, commercial Vehicle need F.I.R./ spot survey if loss is
heavy or T.P. loss occurs)
(6) Final Bill from repairers
(7) Satisfaction Note from the insured
(8) Receipted bill from the repairer, if paid by insured.
(9) Discharge voucher (full and final payment)

Total Loss Claims Whenever a surveyor finds that a vehicle is either beyond
repairs or the repairs are not an economic proposition, he negotiates with the
insured to assess the loss on a Total Loss basis - for a reasonable sum
representing the market value of the vehicle immediately prior to the loss. If the
market value is more than the insured value, the settlement will be brought
about for the insured value. The Insured will be paid in cash and the Insurers will
take over the salvage of the damaged vehicle which will thereafter be disposed
of for their own benefit calling tenders through advertisements in newspapers.
However, before the actual payment is made to the Insured, the Insurer will
collect from him the Registration and Taxation books, ignition keys and blank
TO. and T.T.0. forms duly signed by the insured, so that the salvage is usually
not encouraged, unless insured desires, so as to avoid the hastle of salvage
disposal.

Theft Claims Total losses can also arise due to the theft of the vehicle and
its remaining untraced by the police authorities till the end. These losses will
have to be supported by a copy of the First Information Report (FIR) lodged with
the Police authorities immediately after the theft has been detected. The police
authorities register the complaint allotting it a number of the entry made in the
Station Diary. This number which is usually known as SDE No. or C.R. No. (Crime
Register) has to be quoted by the Insured in the claim intimation to the Insurers.
The police keep the investigations going until the vehicle is traced and delivered
to its owner. However, if they do not succeed in recovering the vehicle after a
period of, say 1-2 months, they file away the case certifying that the case is
classified as true but undetected. This police certificate referred as NonTraceable certificate is essential before a total loss following theft is settled by
the insurers. The documents to be submitted by the Insured will be the same as
those described above. If the R.C. Book and Taxation Certificate are also stolen
along with the vehicle. It will be necessary for the insured to obtain duplicate
ones from the Registering Authority and thereafter deposit them with the
Insurers. The only additional documents will be addressed by the Insured to the
R.T.O. informing about the loss of the vehicle due to theft and filing a Non User
Form so that he is not made liable to pay the taxes. Some insurers also obtain
from the insured a special type of a Discharge on a stamped paper whereby the
Insured undertakes to refund the claim amount if the vehicle is subsequently
traced and delivered to him by the police. He also undertakes in the Discharge
Form to pay any taxes which may be outstanding against the stolen vehicle. The
ignition keys R.C.Books etc. are preserved by the Insurer in their custody so that
these are made readily available if the vehicle is traced at a later date. It is
always prudent to inform the concerned Registering Authority by a Registered
A/D letter that a total loss claim is being processed for payment in respect of
the stolen vehicle and to request them not to transfer the ownership of the

vehicle to any one. This will prevent the thief from disposing of the stolen
vehicle.

THIRD PARTY CLAIMS

Section 165 of the Motor Vehicles Act 1988, empowers the State Governments
to set up Motor Accident Claims Tribunals (MACT) for adjudicating upon third
party claims. When a tribunal has been set up for an area, no civil court has any
jurisdiction to entertain any claim falling under the tribunals jurisdiction.
The aggrieved party has to move the tribunal within a period of six months from
the date of accident. While making the award, the tribunal has to specify the
amount payable by the insurer. The procedure for third party claims is briefly
described as follows: On receipt of notice of claim from the insured, or the third
party or from the MACT, the matter is entrusted to an advocate. Full information
relating to the accident is obtained from the insured. The various documents are
collected and these include Driving Licence Police report Details of drivers
prosecution, if any Death certificate, coroners (PM report) report, if any (fatal
claims). Medical Certificate (bodily injury claims) Details of age, income and
number of dependants etc. A written statement is then filed on the facts of the
case with the MACT by the advocate. Eventually, if the award is made by the
MACT, the amount is paid to the third party against proper receipt.

What's covered under third party motor insurance ?

A comprehensive motor insurance policy typically has two insurance covers
bundled together -the third party insurance and the own damages cover. Some
also come with a built-in personal accident cover. As the names suggest, the
'own damages' and 'personal accident' insurance components are to cover your
losses i.e. damage to your car or personal injuries, disability and death,
respectively.

What does it cover ?

If your vehicle is insured and has a third party liability cover, the compensation
sought by the third party for damages in case of an accident will be fully paid by
your insurance company.
The point to note here is that such compensation can be quite large and
disproportionate to the premium you save. The victim can claim for
compensation under no fault liability or fault liability of the Motor Vehicles Act
1988.

If the claim is filed under the former, the claimant (one who applies for
damages) will get only the minimum statutory relief, says Vijay Kumar, Chief
Technical Officer (Motor), Bajaj Allianz General Insurance.
But, if it is a fault liability claim, the compensation the claimant can ask for is
unlimited, provided he is able to prove the other persons negligence in driving.
However, do note that unlimited compensation is available only for bodily injury
or loss of life. In case of damage to a property, the insurers liability is limited to
7.5 lakh, says Sanjay Datta, Chief Underwriting & Claims, ICICI Lombard. The
rest has to be borne by the owner of the vehicle.
Insurance companies do not encourage claims on damage to ones own vehicle
from another partys policy. This is called a knock-for-knock agreement.
Insurance companies have agreed with each other that claims on damage to
the vehicle of their customers will be handled by themselves says Sanjay
Datta.
This means that if your vehicle is damaged in an accident, you should claim the
damages to it from your own insurer (under the own damage cover).
Only for bodily injury, loss of life or damage to property, will you be encouraged
to claim against the third persons policy.
However, there is no legal bar to claiming the damage to your own vehicle from
the third person; by doing so you can save on the no-claim bonus on your policy.

Claim process
After an accident, when you want to claim for damages from a third party, you
need to file a case in Motor Accidents Case Tribunal. This has to be done within
60 days of the accident, but courts are lenient and accept claims that come
even a year or so later, say experts.
When filing the case, you will be asked for the copies of FIR and surveyors
report (in case of damage to property) and proof of the expenses you are
claiming.
KN Murali, Head Motor Insurance, Royal Sundaram, says that the court will
summon the owner/driver of the reported vehicle and also the insurance
company.
The insurance company will then check if the driver had a valid licence,
insurance policy, etc. before he decides to pay the claim. The support from an
insurance company will however come to you here only if you are claiming for
bodily injury or loss of life or damage to property.
If you are claiming for damage to your own vehicle on third party insurance
despite having a comprehensive motor policy, your insurer will not help you out
in the legal battle, he adds.
On the other hand, if you are one who has received the notice from the court
stating that a third party has filed a claim against you, you have two options,
says, Vijay Kumar, The customer can either ask the insurance company to take
care of the legal proceedings by itself or authorise the insurer to appoint a
lawyer who will contest the case.
But, here again, the insurance company will see if there has been no breach in
the policy and only then will it proceed to appoint a lawyer.