Health fears force insurers to speed up claims settlement

Fear of a health hazard has prompted the finance ministry to direct state run insurance companies to settle shopkeepers' and householders' claims on a war-footing.

"Many goods lying in shops and homes have deteriorated and could result in the spread of diseases. The government has asked us to focus on settlement of these small claims first," said J K Gupta, general manager, The New India Assurance Company.

Total insurance claims are expected to cross Rs 2,000 crore once actual survey of claims is undertaken. According to latest available figures, the four state insurers alone have received 9,300 claims amounting to a total of Rs 1,300 crore.

Of this, more than 3,000 claims valued at Rs 190 crore come from traders, shopkeepers and householders. According to initial estimates each claim could amount to Rs 50,000 to Rs 1 lakh.

The ministry felt that the cost of repairing the damage to the public health if these claims are left unsettled would be more than the claims. Food provisions in many shops like dal, flour, spices and others have started rotting.

The haste in settling what is now construed as "hazardous claims" is on account of the fact that insurance companies settle claims based on the salvage, damaged goods. This means shops, godowns and homes have to ensure that these items are kept for inspection by insurance companies' surveyors before they can be disposed.

With a force of 200 surveyors the four state insurers are finding it difficult to inspect the thousands of claims flooding in. Insurers have been directed to prioritise the small 'hazardous' claims before dealing with large corporate claims including that of Reliance's Patalgana plant that has been submerged in water, said Gupta.

The government is also keen to ensure small traders get back on their feet as their livelihoods depend upon daily cash flows. Many shops these days are insured on account of reliance on bank loans.

Insurance companies are calling surveyors from the north and south to help with the enormous number of claims flooding Maharashtra.

"If I give one surveyor 100 claims to inspect, he would take 100 days and that would defeat the entire objective," said Gupta. New India alone has received 1,700 claims aggregating Rs 40-45 crore from householders' and shopkeepers' policies.