Insurers set to miss August 31 deadline for settling flood claims

General insurers will be missing the extended deadline of August 31 to settle 100 per cent of the claims arising out of the recent floods in Mumbai.

Most players expect to settle all reported claims, aggregating Rs 2,600 crore, by September end. The problem lies in their inability to settle motor claims, which account for over 50 per cent of claims reported.

With limited space in automobile service centres and well over 15,000 reported motor claims, insurers are finding it difficult to settle the same.

Oriental Insurance Co, which received 3,238 claims aggregating Rs 200 crore, has been able to settle just about 25 claims. However, it is confident of settling all the claims by the end of next month.

This is even as the four state insurance players have been able to meet the government directive for settling householders' and shopkeepers' claims.

The government had directed them to settle these "small" claims within a week of the floods in order to ward off health hazards arising out of spoilt food and destroyed household goods.

"We are waiting for surveyors' report as we anticipate that many of these claims will be in excess of Rs 50,000," said V K Bhatia, manager, Oriental Insurance.

The Insurance Regulatory & Development Authority (Irda) has directed insurance companies to settle claims without a surveyor's report in such cases where claims are for less than Rs 50,000.

While insurance companies are not willing to share data on the claims settled, players such as Iffco-Tokio General Insurance said that it has settled 40 per cent of the total 1,017 claims received to date.

"We have called employees and surveyors from outside Mumbai to help hasten the process," said Ajit Narain, CEO, Iffco Tokio General Insurance.

Royal Sundaram Alliance Insurance has settled about 25-30 per cent of the 1,175 claims reported, despite majority being that of motor claims.

Antony Jacob, managing director of the company, said that the maximum time taken for settling claims is about 48-72 hours, but this is only after the affected vehicle has been registered for repairs at a garage and all relevant documents have been received.

Tata AIG General has managed to settle just 66 of the 2,340 claims. This is primarily because over 75 per cent of these claims are motor claims.

"We have set up special cells and have waived some of the procedural requirements in case of genuine claims," said Nishit Pandey, assistant vice-president of the company. It expects the outstanding 2,274 claims amounting to Rs 194 crore to be settled in a month.